Yahoo Finance LIVE: Global stocks fall as US bond yields hit 16-year high
How major markets are performing on Tuesday
Wall Street took its lead from European stock markets on Tuesday, falling into the red as US bond yields hit 16-year high.
The FTSE 100 (^FTSE) was trading 0.5% lower on the day, amid expectations that UK interest rates will remain higher for longer to tackle inflation, while the CAC (^FCHI) was 1% lower in Paris, and the Frankfurt DAX (^GDAXI) was 1.1% lower.
Across the pond, the S&P 500 (^GSPC ) dropped 1.5% by the European close, and the tech-heavy Nasdaq (^IXIC) was 1.8% down. The Dow Jones (^DJI) was 1.3% lower in New York at the time of writing.
The 30-year Treasury yield surged to its highest level since 2007 at 4.856%, putting pressure on stocks.
It came UK food prices fell month-on-month in September for the first time in two years.The British Retail Consortium (BRC) revealed that food inflation decelerated to 9.9% last month, down from 11.5% in August. It is now at its lowest point since August 2022.
Outside of supermarkets, general shop inflation eased to 4.4% in September, down from 4.7% the previous month.
Helen Dickinson, chief executive of the BRC, said: "Customers who bought dairy, margarine, fish and vegetables – all typically own-brand lines – will have found lower prices compared to last month. Households also benefitted from price cuts for school uniforms and other back-to-school essentials.
“We expect shop price inflation to continue to fall over the rest of the year, however there are still many risks to this trend — high interest rates, climbing oil prices, global shortages of sugar, as well as the supply chain disruption from the war in Ukraine.”
London's benchmark index was also held back by energy and mining companies as prices of most commodities fell due to a stronger dollar.
The pound (GBPUSD=X) dipped as low as $1.2059 during the session, its lowest since mid-March, amid expectations that the BoE might be done with interest rate rises.
Read more: Oil falls 1% on strong US dollar, mixed supply cues
Michael Hewson, chief markets analyst at CMC Markets said: "The weekend agreement by US lawmakers to fund the government until 17 November, while kicking that problem into the long grass, has merely served to refocus investor attention on the resilience of the US economy.
"The agreement also shifted the odds towards another rate hike from the Federal Reserve in just under a months’ time given that economic activity in the manufacturing sector appears to have bottomed out in the short term.
"Yields in US treasuries, as well as UK gilts rose sharply on the day helping to act as a drag on equity markets"
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