Stocks Continue to Fall from Highs as Headwinds Mount…..

U.S. stocks finished lower and extended a three-week slump that follows record highs as a wide range of headwinds weighed heavily on investors. The passing of Supreme Court Justice Ruth Bader Ginsburg over the weekend fostered uncertainty regarding the vacancy in the high court, and added another layer of political uneasiness ahead of November’s presidential election. Moreover, spikes in new cases of COVID-19, notably in Europe, has created worry regarding the economic impact of a potential second wave, while suspicious activity allegations toward some major global banks applied pressure on the financial sector. TikTok remained in focus and preserved elevated U.S.-China tensions amid conflicting reports regarding the video-sharing app’s partnership with Oracle and Dow member Walmart. Nikola tumbled after the electric truck maker announced that founder Trevor Milton is voluntarily stepping down, and Dow member Microsoft announced plans to acquire Zeni Max Media for $7.5 billion. Treasury yields fell as bond prices rose, and the U.S. dollar rallied. Gold and crude oil prices dropped. Asia finished broadly lower, though Japanese markets were closed for a holiday, and Europe closed lower as well.

The Dow Jones Industrial Average fell 510 points (1.8%) to 27,148, the S&P 500 Index lost 38 points (1.2%) to 3,281, and the Nasdaq Composite decreased 14 points (0.1%) to 10,779. In heavy volume, 1.2 billion shares were traded on the NYSE and 3.8 billion shares changed hands on the NASDAQ. WTI crude oil lost $1.78 to $39.54 per barrel and wholesale gasoline was $0.06 lower at $1.18 per gallon. Elsewhere, the Bloomberg gold spot price dropped $39.65 to $1,911.21 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—moved 0.6% higher at 93.55.

Treasury yields decline as stock markets continue slide…..

Treasuries were higher as the markets continued the recent uptick in volatility, while the economic calendar was void of any major releases today. The yield on the 2-year note was little changed at 0.14%, the yield on the 10-year note declined 2 basis points (bps) to 0.67%, and the 30-year bond rate decreased 3 bps to 1.42%.

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