The Dow scrambled to avoid a third straight loss as the main yield curve on US Treasury bonds flashed a major recession warning. | Source: Johannes EISELE / AFP
The Dow Jones scrambled to avoid a third straight loss as bond yields triggered a dangerous recession alarm, forcing investors to reckon with the argument that the stock market’s bull run is over – and has been since 2017.
Dow Seeks to Vanquish Losing Streak
Wall Street’s three major indices braced for declines during a dreary futures session, only to spike when the opening bell rang. The Dow Jones Industrial Average climbed 63.99 points or 0.25% to 25,961.7.
The S&P 500 rose 6.89 points or 0.24% to 2,889.98, and the Nasdaq jumped to 7,897.12 for an increase of 33.7 points or 0.43%.
S&P 500 Dividends Trump Bond Yields
The Dow and broader stock market climbed as Wall Street weathered a storm of geopolitical threats, ranging from Argentina’s populist uprising to Hong Kong’s increasingly violent anti-government protests.
Meanwhile, plunging bond yields have forced investors into a corner, as the flight to safe-haven assets has hiked bond prices dramatically.
According to the Wall Street Journal, 60% of S&P 500 stocks currently offer a higher dividend yield than the 10-Year US Treasury note. Thus, while equities might not be attractive, they’re increasingly the only game in town.
“This is a hard period for most investors to navigate through,” Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management,