The Dow Plunges More Than 500 Points as Bond Yields Rise and Earnings Season Enters Its Peak

(CNN) –– Wall Street is headed for another day in the red, right at the start of this short trading week, as investors grapple with earnings seasons and rising Treasury yields.

All three major indices opened lower and extended their losses throughout the morning. The Dow plunged more than 500 points, or 1.4%, while the S&P 500 fell 1.3%. For its part, the Nasdaq Composite fell 1.2%.

The market was closed this Monday for Martin Luther King Jr. Day.

“The culprit this morning, as it seems to be every day, is interest rates, with the 10-year yield over 1.8% and the 2-year yield down over 1%,” said Paul Hickey of Bespoke Investment Group, in an email to clients.

Yields on both bonds have not been at similar levels since before the pandemic. For the 10-year, it was in January 2020 that it last yielded more than 1.8%. And the 2-year hasn’t touched more than 1% since February 2020, according to Refinitiv.

“Wall Street has also been under pressure thanks to Federal Reserve tightening concerns, rising rates and concerns about slowing growth,” analysts at Action Economics said in their morning note.