U.S. stocks took a tumble Tuesday with the Dow Jones down by more than 500 points after the 10-year Treasury yield surpassed 3 percent for the first time since 2014.
The selling pressure came after the 10-year Treasury yield touched the psychologically important 3% level for the first time in four years, a move that comes as first-quarter earnings season was failing to excite investors, despite some strong results.
While the earnings season remained in full swing, the tone was generally negative, with several bellwether stocks slumping despite posting numbers that were ahead of analyst forecasts.
Hussein Sayed, chief market strategist at FXTM, said that “the 3% by itself is just a psychological level and not a significant threat, but if a break above leads to further selling in Treasury bonds, that’s going to be a serious warning signal for equity bulls. With a current world running on A.I and algorithms, a selloff may look ugly.”