U.S. stock prices and bond yields tumbled Thursday as doubts grew about the global economy’s ability to keep expanding rapidly.
The S&P 500 and Dow Jones Industrial Average were each down by around 1.4 percent by 11 in the morning. The Nasdaq Composite, heavy with tech growth stocks, was down 1.6 percent. The Russell 2000 index, which is full of smaller companies less exposed to global demand, was down by 1.35 percent.
The yeild on the 10-year Treasury note fell to 1.28 percent, down four-hundredths of a percentage point, the lowest yield since February. Yields move in the opposite direction of prices, so a declining yield indicates investors are bidding up Treasuries, typically a sign that they are seeking a safe-haven investment.
The major indexes ended last week at record highs but investors have since become wary that growth may have already peaked and that economic expansion in the U.S. and around the globe may be slowing.
The minutes of the Federal Reserve’s June meeting released Wednesday showed that central bank officials were already discussing not just whether to reduce bond purchases but debating the details of such a reduction. This has some investors convinced that the Fed could tighten policy sooner than expected to combat higher than anticipated inflation.
Eight of the eleven sectors of the S&P were down in Thursday morning trading. Consumer Staples and Energy were largely unchanged and Utilities were up slightly, a pattern that suggests defensive trading.