- US stocks' early-year rally has ground to a halt in recent months.
- The benchmark S&P 500 index just notched its longest losing streak of 2023, per Refinitiv.
US stocks are now on their longest losing streak of 2023, with an unprecedented sell-off in longer-duration bonds spooking Wall Street and weighing on equities.
The S&P 500 slipped 0.2% Monday as investors fretted about 10-year Treasury yields hitting a 16-year high of 5%, having also fallen over the final four trading days of last week.
It's the first time since December 2022 that the benchmark index has ended five straight sessions in the red, according to data from Refinitiv.
Stocks started 2023 on a tear, powered higher by the massive explosion of interest in AI and investors' belief that the Federal Reserve would start cutting interest rates before the end of the year.
But they've given up some of those gains in recent months, with the S&P 500 now down 8% from its peak on July 31. The Nasdaq Composite has slipped 9% and the Dow Jones Industrial Average has shed more than 2,500 points over the same period.
Spiking bond yields have led to the sell-off deepening in recent weeks.
Yields on 10- and 30-year US Treasurys have soared above 5% for the first time since 2007, with the Fed signaling to investors that it will hold borrowing costs at their current levels well into 2024 in a bid to kill off inflation, which is still lingering above the central bank's 2% target.
When bond yields rise, stocks tend to suffer because investors are able to pivot to lower-risk assets that offer a better relative rate of return.