U.S. stock markets fell on Tuesday as investors awaited the Fed’s interest rate decision and Treasury yields rose to nearly two-decade highs. The strong rise in oil prices increased concerns about inflation and the tightening policy of central banks.
The S&P 500, which broadly tracks large companies, fell 0.5 percent. The technology-focused Nasdaq weakened by 0.8 percent. The flagship Dow Jones index fell 0.6 percent.
The yield on the 10-year U.S. Treasury note rose to 5.041 percent, its highest level since 2007. The yield later retreated from its peak and was just above 5.00 percent at Wall Street’s close.
Global bond yields have been the focus of stock market attention in recent weeks. Government bonds have been sold as worries about the inflationary effects of the US-Iranian war and interest rate hikes by central banks have grown.
Oil rose clearly. Brent oil rose nearly three percent to $108.80 per barrel. US WTI crude oil rose almost five percent to $106.08 per barrel.
Investors expect the Fed to raise its key interest rate on Wednesday with a probability of more than 94 percent.
Cryptocurrencies went down. Bitcoin fell 3.8 percent to $76,082 after the US Senate rejected a major crypto market structure bill.
Network equipment manufacturer on the New York Stock Exchange Nokian depository receipt, or ADR, rose 2.0 percent to $9.84.