Wall street opens on mute note amid rate hike fears; US 10Y bond yields hit three-year high

The US stock market opened the week on a muted note with the Dow Jones, the S&P 500, and the NASDAQ 100 declining as much as 0.5% on Monday. The undertone remains bearish after Federal Reserve Chairman Kevin Warsh’s comments last week on inflation and interest rates. The Fed chair remains concerned about sticky inflation without providing any outlook on interest rates.

Soon after his speech at the Jackson Hole Symposium, the US Treasury yields clawed back all the losses of the previous week, bringing back the fears of interest rate hikes. The CME Fedwatch tool now shows a 63% probability of a rate hike in the coming policy meeting in the September meeting.

Consequently, the US 10Y Treasury yields spiked above 4.75%, last seen in October 2023. Similarly, the 30Y yields hit a two-decade high. Similarly, the short-term 2Y note also rose to one-year high levels.

However, the US benchmark indices are on track of snapping its monthly losing streak by gaining as much as 4% in August. The Dow Jones and the S&P 500 made fresh record highs this month, gaining over 1.4% and 2.4%, respectively, as of Monday 7:30 pm IST. Meanwhile, the NASDAQ 100 soared over 3.5% for the month.

At the stock-specific level, in the regular trading session on Monday, shares of CrowdStrike Holdings (+4.1%), Tesla Inc (+3.5%), Qualcomm (+2.7%), and SanDisk Corporation (+2.4%) were among the top gainers from the NASDAQ 100 index.

Tim Cook resigns

Meanwhile, shares of Apple Inc. traded in a muted range after its CEO Tim Cook announced his exit effective September 1. He led the company for more than 15 years, making it a $4 trillion company. He will be succeeded by John Ternus, who has worked with Apple for over 20 years headed the engineering division since 2021. However, Tim will continue to work with the company as executive chairman. The development comes ahead of Apple’s key event on September 9, where they will unveil a new lineup of products.