Herbert Lash and Mark Jones
NEW YORK / LONDON (Reuters) – Global stocks declined and US Treasury yields plunged on Tuesday as low trading volume, calm in economic news and lack of a catalyst for a rally in stocks triggered a sell-off by investors worried that markets will continue to rally.
The high-tech Nasdaq fell 2.7%, the biggest one-day drop in six weeks, while the 10-year Treasury yield fell to a low of 1.557%, usually pushing tech stocks higher.
Palladium prices soared to all-time highs, fueled by concerns about a shortage of autocatalyzed metal amid a gradual rise in demand.
The Refinitiv / CoreCommodity CRB Index traded near three-year highs as commodity prices continue to rise as investors gamble on rising demand as the economy recovers. The rise in commodity prices has sparked talk of a spike in inflation.
By selling stocks, investors were buying government debt, pushing treasury prices up and lowering yields.
“There is not a lot of conviction among traders about how the markets should go,” said Patrick Leary, chief market strategist and senior trader at Incapital. “We appreciated a lot of the newfound optimism.”
The MSCI index for global equity markets fell 1.23% to 694.67.
On Wall Street, the Dow Jones Industrial Average dropped 0.5%, the S&P 500 dropped 1.29%, and the Nasdaq Composite dropped 2.72%.
Cyclical sensitive sectors including energy and finance outperformed growth stocks.
In foreign exchange markets, the dollar has regained some footing to partly unwind last month’s lengthy fall as investors equalized ahead of monthly payroll data due later in the week. [FRX/]
The dollar index rose 0.314%, the euro fell 0.38% to $ 1 in 2015. The Japanese yen weakened 0.22% against the dollar to 109.31 per dollar.
Signs that the world’s major central banks are still reluctant to abandon their massive stimulus programs are keeping 10-year US Treasury yields below 1.65% and German bond yields below 13-month highs. [GVD/EUR]
Australia’s central bank left its key interest rates almost at zero the day before at its fifth meeting in a row and pledged to maintain its policy for an extended period of time.
The Australian S & P / ASX200 rose 0.6% and the Hong Kong index rose 0.7% in sluggish Asian trading due to weekends in China and Japan.
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Cryptocurrency Ether hit another all-time high, close to $ 3,500, before equalizing profits to a 5.4% decline.
Oil prices rose on Tuesday after other U.S. states eased restrictions due to the pandemic and the European Union sought to attract travelers, although the surge in COVID-19 cases in India has limited growth.
Brent crude futures rose $ 1.22 to $ 68.78 a barrel. US oil futures rose $ 1.12 to $ 65.61 a barrel.
Spot gold prices fell 17.55%.
(Reporting by Mark Jones; Editing by Ed Osmond, Will Dunham, and John Stonestreet)