S&P 500: US Stocks Slide on Rising Yields, McDonald’s E. Coli News…

Treasury yields have become a major headwind for equities, as the 10-year note yield rose to 4.23%. Higher yields typically hurt stocks by raising borrowing costs and making bonds more appealing relative to riskier assets like equities. Despite the Federal Reserve cutting rates earlier this year, resilient economic data and concerns over the growing federal deficit have pushed yields higher.

There is growing uncertainty among traders regarding the Fed’s future actions. While the Fed had previously signaled another 50 basis points of rate cuts by year-end, the rise in yields and persistent strength in the economy may force central bankers to reconsider or delay further easing.

Sector Analysis

The broader market saw a mix of performance across sectors. Consumer discretionary led declines, with the sector down 0.82%, as McDonald’s news heavily impacted sentiment. Consumer staples also fell, down 0.28%, dragged by Coca-Cola’s 2% dip. The energy sector lost 0.47%, pressured by slightly lower oil prices.

On the positive side, financials and real estate showed resilience. Financials gained 0.03%, reflecting continued strength despite rising yields. The real estate sector, which is typically sensitive to interest rates, rose 0.5%, benefiting from a defensive shift as investors sought stable returns. Utilities also climbed 0.23%, another defensive play amid market uncertainty.

Weak Housing Market as Sales Hit 14-Year Low

The U.S. housing market showed further signs of weakness in August, as existing home sales hit their lowest level since 2014, according to the National Association of Realtors. Sales fell to an annualized rate of 3.86 million, down 2.5% from July and 4.2% compared to a year ago. This marks the lowest level of sales since October 2010.

Despite the slowdown in sales, home prices continue to climb. The median sale price reached $416,700, up 3.1% from the prior year. However, affordability remains a significant issue, with first-time buyers making up only 26% of all purchases, tied for the lowest level on record.