US Stock Market

It probably felt like the market suddenly yanked the rug today: stocks were just at record highs, and now you’re seeing red across the board and hearing that bond yields are “unhinged.” The spine of the day is simple: a bond and oil shock pushed interest rates sharply higher, markets stopped talking about cuts and started talking about hikes, and stocks recoiled.

What actually moved

Major indexes fell around 1–2% (small caps closer to 2½%), and only about a quarter of stocks were up. The “average stock” did worse than the big indexes: the equal‑weight S&P dropped almost 1.8%, and there were roughly five times as many new 20‑day lows as highs. That’s what a broad, uncomfortable down day looks like.

At the same time, the 10‑year Treasury yield jumped to about 4.6%, its highest in over a year. When you hear “bond selloff,” this is what it means: bond prices go down, yields go up. The whole curve moved higher, especially longer‑term rates.

Why? A string of hot inflation data (CPI and producer prices both above forecasts) plus stronger‑than‑expected factory and industrial output today tell the same story: inflation is heating back up while the economy is still humming. Layer on expensive oil tied to the Strait of Hormuz disruption, and markets are now pricing decent odds of a Fed rate hike by late this year instead of cuts.