Stock prices took a beating yesterday. The Dow Jones Industrial Average fell 666 points, losing 2-and-a-half percent of its value. Bond prices have fallen at their worst levels in four years. As NPR’s Jim Zarroli reports, rising interest rates have thrown a scare into the market.
The stock market has been rising for so long, it’s easy to forget it can have bad days, as well. Yesterday was a reminder that what goes up can come down. The January jobs report came out, and it showed pretty solid job gains. The unemployment rate remained at a very low 4.1 percent. What spooked investors was a big jump in average hourly wages. That’s good news for workers who have had to endure anemic wage growth for years. But the increase was a sign that inflation is becoming more of a threat, and investors are worried that the Federal Reserve will increase rates faster than it already is.
It had already been a bad week in the stock market, and the inflation scare just made things worse. Bond rates shot up with the yield on the 10-year Treasury note above 2.8 percent. That was its highest level since 2014. And stocks fell in response. The Standard & Poor’s 500 Index fell 2.1 percent. All in all, it turned out to be the worst week for the Dow since January 2016. But stocks have been climbing for a long time, and even with yesterday’s drop, prices are still up for the year. Jim Zarroli, NPR News, New York.
