NEW YORK (AP) 鈥� Wall Street tumbled as it focused on the downside of a surprisingly strong job market. The S&P 500 lost 1.4% Tuesday. The Dow fell 430 points and wiped out the last of its gains for the year so far. The Nasdaq composite led the market lower with a 1.9% drop as Big Tech stocks were among the market鈥檚 biggest losers. Stocks fell after a report showed U.S. employers have many more job openings than expected. That raised expectations for interest rates to stay high, and the 10-year Treasury yield hit its highest level since 2007.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
NEW YORK (AP) 鈥� Wall Street is sinking sharply Tuesday as it focuses on the downside of a surprisingly strong job market.
The S&P 500 was 1.5% lower in late trading and nearly back to where it was in May. The Dow Jones Industrial Average was down 475 points, or 1.4%, at 32,957, as of 3:10 p.m. Eastern time, and wiped out the last of its gains made for the year so far. The Nasdaq composite was leading the market lower with a 2% drop as Big Tech stocks were among the market's biggest losers.
Stocks fell as the pressure on them cranked even higher from rising Treasury yields in the bond market. Such weight has been the main reason the stock market has lost more than 40% of its value since the end of July, after charging higher for much of the year.
The 10-year Treasury yield climbed again Tuesday, up to 4.80% from 4.69% late Monday and from just 0.50% early in the pandemic. It touched its highest level since 2007 and rose after a report showed U.S. employers have than expected.
When bonds are paying so much more in interest, they pull investment dollars away from stocks and other investments prone to bigger swings in price than bonds. High yields also make borrowing more expensive for companies and households across the economy, which can hurt corporate profits.
Yields have been on the march because investors are increasingly taking the Federal Reserve at its word that it will keep its main interest rate high for a long time in order to drive down inflation. its federal funds rate to the highest level since 2001, and it indicated last month it may keep the rate higher in 2024 than it earlier expected.
Fed Gov. Michelle Bowman said in a speech Monday that she expects it will likely be appropriate 鈥渢o raise rates further and hold them at a restrictive level for some time.鈥� Restrictive is what Fed officials call high-enough rates to slow the overall economy.
Tuesday's report on the U.S. job market could give the Fed more reason to keep rates high. It showed employers were advertising 9.6 million job openings at the end of August, much higher than the 8.9 million that economists expected.
Such hunger for workers could keep upward pressure on wages to attract employees. While that would be welcomed by workers trying to keep up with inflation, the Fed's fear is that could give inflation more fuel.
鈥淚t鈥檚 a classic good news is bad news because the potential impact of higher interest rates on both the economy and markets is becoming concerning as the yield on the 10-year Treasury note continues to march higher,鈥� said Yung-Yu Ma, chief investment officer at BMO Wealth Management.
Big Tech stocks were some of the heaviest weights on the market. They and other high-growth stocks are seen as some of the biggest victims of high interest rates. Amazon fell 3.9%, Microsoft dropped 3% and Nvidia lost 2.8%.
Several other challenges are also tugging at Wall Street, besides higher yields. The could drag on spending by U.S. households, which has been strong enough to help keep the economy out of a recession despite high interest rates. Higher oil prices are threatening to worsen inflation, and economies around the world look shaky.
A weaker recovery than expected in China鈥檚 economy was one of the main reasons McCormick, a maker of cooking spices, reported slightly weaker revenue for its latest quarter than analysts expected. Its profit matched expectations, but its stock fell 8.5%.
The world鈥檚 second-largest economy is also facing a crisis within its property development industry, and Hong Kong鈥檚 Hang Seng index tumbled 2.7% as investors unloaded stocks of developers.
However, China Evergrande jumped 28% after resuming trading Tuesday. Its shares were suspended last week as the troubled real estate developer announced that its chairman was under investigation.
Markets in mainland China and South Korea remained closed for holidays, while Japan鈥檚 Nikkei 225 index fell 1.6%. Stocks were also lower across much of Europe.
On Wall Street, Point Biopharma, which develops cancer-fighting treatments, soared 85% after Eli Lilly said it was buying the company for about $1.4 billion in cash. Eli Lilly fell 2.7%.
Oil prices ticked higher a day after slumping sharply to trim their big gains since the summer.
A barrel of benchmark U.S. crude rose 41 cents to settle at $89.23 after charging mostly higher from $70 during the summer. Brent crude, the international standard, rose 21 cents to $90.92 per barrel.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
Stan Choe, The Associated Press
