US stocks fell on Wednesday as stronger economic data pushed Treasury yields sharply higher and increased expectations of another Federal Reserve rate hike.
The Dow Jones Industrial Average fell more than 350 points, or 0.7%, while the S&P 500 dropped 0.8%. The Nasdaq Composite declined 1.1%, snapping a four-day winning streak.
The US 10-year Treasury yield surged to 5.135%, its highest level since July 2007, while the two-year yield reached 4.947%, its highest since May 2024.
Rate expectations also shifted higher, with markets pricing a more than 68% chance of another Fed increase in October, up from around 49% a week earlier.
The move followed stronger-than-expected US business activity data, which pointed to continued economic strength but also highlighted supply-chain pressures and higher fuel and transport costs.
Oil prices rebounded, with Brent rising 3.9% to US$103.08 a barrel and WTI gaining 1.8% to US$92.16.
Australian Market Outlook
Australian shares face a weaker start following the sell-off on Wall Street and sharp rise in global bond yields.
The S&P/ASX 200 ended its previous session 0.1% lower at 8,630.80 and lost 1.3% over the week, with profit-taking among miners weighing on the market.
Materials came under pressure as copper retreated from record levels and gold fell towards US$4,600 an ounce. BHP and Rio Tinto both declined after recently reaching record highs, while gold and lithium stocks also weakened.
Higher US yields and growing expectations of further Federal Reserve tightening are likely to remain key influences on the local market.
