As the 10-year US treasury bond yield climbs to its highest mark in five years, the US stock market took a dip, this week. Investors now wait for the latest quarterly earnings report to begin forming strategies for the months to come.
Indeed, the stock market currently seems to reflect this shaky investor confidence. For one, the Dow Jones Industrial Average slipped nearly 40 points this week, establishing a decline of 0.11%. In addition, the Standard & Poors 500 closed about 0.2% down. Similarly, the Nasdaq Composite slipped 0.14%.
Specifically, software companies took a bit of a hit, as investors turned their attention away from growth-oriented stocks, even with promising yields. Some of the biggest disappointments were Zoom Video, which fell 4.14%, and Datadog, which declined 3.62%. Okta and Workday fared only a little better, slipping 2.69% and 2.3%, respectively.
The down day was not without high and low action, though. The notably choppy session was certainly affected by the spikes in the benchmark 10-year treasury yield. Starting at 1.71% in March, the benchmark traded as high as 2.884%, at one point, which is the highest value it has seen in more than three years.
Not all of the market showed a poor performance. Twitter shares posted up 7.4%, mostly on the heels of their Friday announcement that the board had adopted what is known as a limited duration shareholder rights plan. This “poison pill” was a direct response to the $43 billion acquisition offer from Elon Musk.
Stock for Bank of America also saw a bump—of 3.41%–likely as a result of its recent report of a 13% YOY drop in EPS for Q1. While that may sound like a bad thing, these numbers beat analyst expectations.
Speaking of expectations, investors are currently waiting on a handful of other high-profile earnings, which should come out later this week. This includes big names like United Airlines, Tesla, American Express, and Netflix.