S&P 500 Falls as Oil Prices and Bond Yields Rise
Listen to the story
The S&P 500, a major US stock index, fell as rising oil prices and global bond yields put pressure on the market. The Dow and Nasdaq also extended losses.
The drop came amid ongoing tensions between the United States and Iran. A stalemate between the two countries has pushed oil prices higher, since investors worry about possible disruptions to oil supply.
At the same time, bond yields around the world have risen. When investors buy government bonds, they earn a yield. Higher yields can make stocks less attractive because bonds offer safer returns.
Tech stocks, which make up a large part of the Nasdaq, also fell and dragged down Wall Street overall. Technology companies are often sensitive to changes in bond yields.
Futures for the Dow, S&P 500 and Nasdaq pointed lower, showing that investors expected the market to open weaker. This kind of trading gives an early sign of how the day might go.
Analysts are watching the US-Iran situation closely, since any change could quickly affect oil prices, bond yields and, in turn, the stock market. Investors are being cautious until there is more clarity.
For now, the combination of elevated oil prices and rising yields has created a difficult environment for stocks, especially in the technology sector.
Vocabulary10 words
- stock index
- a number that shows how a group of company shares is doing
- stalemate
- a situation with no agreement or change between two sides
- bond yields
- the return investors get from lending money through bonds
- tech stocks
- shares of technology companies
- Wall Street
- a common name for the US stock market
- futures
- agreements to buy or sell something at a future date and price
- disruptions
- problems that stop something from working normally
- returns
- the money made from an investment
- elevated
- higher than usual
- cautious
- careful because of possible risk
Quiz
Answer key
1. Elevated oil prices and rising bond yields 2. They offer investors a safer alternative return 3. True
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
The S&P 500, a major US stock index, fell as rising oil prices and global _____ put pressure on the market.
The drop came amid ongoing tensions between the United States and _____.
A _____ between the two countries has pushed oil prices higher.
At the same time, bond _____ around the world have risen.
Tech stocks, which make up a large part of the _____, also fell and dragged down Wall Street overall.
_____ for the Dow, S&P 500 and Nasdaq pointed lower.
Analysts are watching the US-Iran situation closely, since any change could quickly affect oil prices, bond yields and, in turn, the stock _____.
Investors are being _____ until there is more clarity.
The combination of _____ oil prices and rising yields has created a difficult environment for stocks.
Discussion questions
- Why might rising bond yields make investors less interested in buying stocks?
- How could tensions between two countries affect global markets, based on this article?
- Why are technology stocks often more sensitive to interest rate or yield changes?
- What information would help you understand whether this market drop is temporary or long-term?
More Business stories
Next story · Medium
Media Groups Back ABC Against Pressure From Trump Administration