Yields on the 10-year Treasury note, which last week crossed 2 percent for the first time since 2019, fell about eight basis points, or 0.08 percentage points, to about 1.96 percent. Yields fall as prices for bonds rise, which happens when investors buy them as they move money out of riskier investments like stocks.
Inflation F.A.Q.
What is inflation? Inflation is a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
But the broad nature of Thursday’s sell-off pointed to more than one trigger. Oil has been trading at prices not seen since 2014, and an invasion by Russia, a big oil producer and Europe’s largest supplier of natural gas, would almost certainly push energy prices higher. But on Thursday, oil fell, with West Texas Intermediate, the U.S. crude benchmark, down 2 percent, to $91.76 a barrel. Natural gas fell more than 4 percent.
“The concerns for growth going forward and recession risks are new to traders’ minds,” said Edward Moya, a senior market analyst at OANDA. “There’s a lot of fear that the optimistic growth outlook for 2023 is up in the air.”
Markets have been volatile for months, with concerns about the Omicron variant’s impact on the economy in November and December bleeding into uncertainty in January and February about persistently high inflation and how the Fed will react to it. Thursday’s drop was the S&P 500’s worst day in only two weeks, and if the index ends this week in the red it will be its fifth weekly drop just seven weeks into the year. The index is down 8.7 percent since its Jan. 3 high. The Nasdaq composite peaked on Nov. 19, just before the Omicron variant was disclosed, and is down 14.6 percent since then.
The consumer staples sector was one of the few that did not fall on Thursday. Walmart was one of the best-performing companies in the S&P 500, climbing 4 percent after it reported that its revenue rose to $152.9 billion, up 0.5 percent in the three months ending in January from a year earlier. The company also said that sales across its U.S. business increased 5.7 percent to about $105 billion in the quarter.
AutoNation fell 3.8 percent, as the company’s chief executive said it was difficult to forecast whether it could sustain its current high profit levels in 2022. The company reported on Thursday a profit of $387 million in its latest quarter, more than double its profit from a year earlier, while revenue rose 14 percent to $6.6 billion.
In Europe, stock indexes edged lower. The Stoxx Europe 600 fell 0.7 percent on Thursday. Asian markets closed mixed.
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