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Treasury Yields Rise, Dow Jones Deflates After Dismal Economic Data

  • 10-year U.S. Treasury yield peaked at 1.86% on Monday.
  • Dow Jones declined by as much as 269 points.
  • U.S. economy remains under pressure in Q4, according to latest factory and construction spending data.

U.S. government debt yields rose on Monday, as bond prices fell in the wake of dismal factory and construction spending reports.

The latest report tempered optimism that the U.S. economy was back on track following an unexpected revision to third-quarter GDP numbers last week.

Treasury Yields Extend Recovery

Investors moved into government bonds Monday after a pair of data releases sounded the alarm on the U.S. economy. The yield on the benchmark 10-year Treasury note reached an intraday high of 1.86%, gaining around 8 basis points, while the yield on the 30-year Treasury bond hit 2.30%.

10 year Treasury yield
U.S. 10-year Treasury yield has shown significant volatility over the past three months. | Chart: CNBC

Bond markets have been sensitive to trade-war speculation as the United States and China struggle to come to terms on a new agreement. On Sunday, Chinese state media reported that Beijing wants a total rollback on tariffs before signing off on a phase one trade deal.

Dow, S&P 500, Nasdaq Fall

Stocks headed for one of their worst trading sessions of the quarter Monday, as President Trump’s new tariff gambit and a string of disappointing data releases weighed on investors’ sentiment.

The Dow Jones Industrial Average (DJIA) plunged by as much as 269 points, eventually settling near session lows. The blue-chip index settled at 27,783.79, down 1% on the day.

Dow Jones Industrial Average
The Dow Jones Industrial Average plunges below 28,000 on Monday. | Chart: Bloomberg

The broad S&P 500 Index of large-cap stocks fell 0.9% to close at 3,1113.92. Nine of 11 primary sectors contributed to the declines, with information technology, industrials and real estate reeling the most.

Meanwhile, the technology-focused Nasdaq Composite Index closed 1.1% lower at 8,567,99

The CBOE Volatility Index, Wall Street’s preferred measure of investor anxiety, touched its highest level in two-and-a-half months. Volatility rises as stocks fall.

VIX, which trades on a scale of 1-100 where 20 represents the historic average, peaked at 15.27 for a gain of 21%.

This article was edited by Josiah Wilmoth.

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