The 10-year Treasury yield reached 1.55% from 1.53%, and was above the key level of 1.54%, before falling again. The yield has climbed 1.31% since late September, when the Federal Reserve confirmed that it would soon start cutting or cutting its bond purchases. This would result in less money in the bond market, lowering bond prices and increasing their yields. Soaring bond yields make future earnings immediately less valuable, forcing investors to ditch stocks.

The ADP jobs report on Wednesday showed that the US economy created 568,000 private sector jobs in September, above expectations of 425,000. Investors look to the wage report from the Bureau of Labor Statistics Friday for a final reading on the economy.

It comes as the short-term economic picture elsewhere looks bleak, as inflation heats up. Factory orders in Germany fell 7.7% month-over-month, worse than the expected decline of 2.1%, while retail sales in the European Union rose 0.3 %, missing the expected increase of 0.8%. Meanwhile, supply shortages around the world that contribute to low productivity are also creating inflation, which could undermine consumer demand.

“Negative 7.7%… blame car chips, blame supply chain problems… The stagflation argument continues to grow,” wrote Andrew Brenner of NatAlliance Securities.

Companies are reporting third-quarter earnings and already some are falling short of sales expectations due to shortages, while others are reporting that their profit margins are squeezed.

In addition, the more persistent inflation, the more likely the Federal Reserve is to raise short-term interest rates in 2022. Stagnant economic growth and higher rates could, at some point, put the brakes on growth. ‘economy. The 2-year Treasury yield fell from 0.28% to 0.3%.

European sentiment has also been weighed amid a global energy crisis that has seen natural gas prices in the region rise by more than 500% since the start of the year, reaching 20% ​​on Tuesday alone.

Elsewhere, New Zealand’s central bank raised rates for the first time in seven years, hitting the main policy rate by 25 basis points to 0.5%. The Reserve Bank of New Zealand has warned of continued cost pressures and inflation expected to exceed 4% in the near term.

Here are six actions in motion Wednesday

Palantir Technologies

(PLTR) rose 5.7% after the company announced Tuesday night that it had won an $ 823 million U.S. Army intelligence contract.

Novavax

(NVAX) was down 1.6%, continuing a 4.6% decline on Tuesday after the company announced a number of new executive appointments.

United States Steel
Corp.

(X) and

Nucor

(NUE) were down 6.4% and 2%, respectively, after Goldman Sachs downgraded the two companies. US Steel was cut to sell from neutral, while Nucor was cut to neutral to buy.

American Airlines

The stock (AAL) fell 4% after Goldman Sachs demoted it to Sell from Neutral. The investment bank also lowered the rating

JetBlue Airways

(JBLU) to Neutral from Buy. JetBlue shares fell 4%.

Write to Jacob Sonenshine at [email protected]