Jeffrey Gundlach, chief executive of Doubleline Capital, told Reuters on Thursday that the 30-year U.S. Treasury bond yield has broken above a multi-year base, which should lead to significantly higher yields for financial markets.
Bonds impact the economy through the variables that determine economic growth.
The dollar index .DXY was flat, with the euro EUR= up 0.31 percent to $1.1512. Procter & Gamble fell 1.6 percent.
"That sense of the market's rising discomfort about inflation risks leads me to expect the wage inflation reading within the US nonfarm payrolls on Friday will be critical to the current sell-off", wrote Brian Daingerfield, macro strategist at NatWest Markets.
Treasuries resumed a slide as investors speculated the low unemployment rate and major upward revision to prior months would do little to deter the Fed from raising rates for a fourth time this year. German lenders Commerzbank and Deutsche Bank were up 1.9 and 1.5 per cent, respectively, as German 10-year bond yields hit a 4-1/2 month high.
The S&P 500 fell 0.6 percent at 4 p.m.in NY. The Nasdaq composite shed 46 points, or 0.6 percent, to 7,978. The S&P 500 index was down 20.50 points at 2,905.01, while the Nasdaq composite was down 103.65 points at 7,921.44. Stocks began the day higher after the employment data added to confidence in the strength of the American economy.
The 10-year U.S. Treasury yield posted its biggest daily jump since the 2016 U.S. presidential election on Wednesday after activity in the service sector hit a 21-year high and ADP private payrolls data for September came in stronger than expected. Intel lost 1.1 percent to $47.63 and Netflix lost 2.78 percent to $353.62.
Nene ofreció a ladrones sus ahorros del Ratón Pérez
Según apuntó, "recién aceptaron que la nena volviera con su madre cuando se estaban yendo". A esa hora llegaba en su coche una mujer de 35 años, junto a su hijita de 2 años.
US Treasury bond yields are on a seven-year high, echoing a market correction in February when rising yields of risk-free government debt made equities less attractive and lowered their value.
Lingering worries about Italy's finances pushed Milan down 0.9 per cent, while London's FTSE, Frankfurt's DAX and the CAC in Paris were off 0.6-0.8 per cent and Wall Street futures were modestly weaker. Heating oil dipped 0.3 percent to $2.39 a gallon.
The Nikkei .n225 added 0.4 percent on bets the falling yen would boost sales and profits at Japan's many exporters. The Japanese yen was little changed versus the greenback at ¥113.89 to the dollar.
Oil prices fell as the prospect of increased crude production from Saudi Arabia and Russian Federation prompted profit-taking the day after futures hit four-year highs on a boost from imminent USA sanctions on OPEC's No. 3 producer Iran.
"Rapidly rising Treasury yields are rocking equity markets around the globe, with high price-to-earnings tech stocks leading the decline", said Yasuo Sakuma, chief investment officer at Libra Investments.
Higher U.S. yields are anything but favourable for emerging markets as they tend to draw away much-needed foreign funds while pressuring local currencies.
The December gold contract was up US$5.40 at US$1,208.30 an ounce and the December copper contract was down 0.35 of a cent at US$2.83 a pound. The euro rose to $1.1525 from $1.1515.