Expectations of a rate hike has pulled down U.S. stocks, with Dow losing more than 177 points

Dow Jones Industrial Average

Markets in the United States finished on their weakest level in the year on Monday’s closing trade. This came in after signs of a possible interest rate hike in the near future, following the recent rise of 10-year treasury yields.

The 10-year Treasury yield benchmark rose as high as 2.7 percent, marking its best level since April 2014. However, this movement of yields has somehow indicated a rapid interest rate hike. Bleakly Advisory Group’s chief investment officer Peter Boockvar said that expectations of inflation and a possible rate hike are currently rising, adding that the next key level of 10-year treasury yields is about 2.8 percent.

Looking at U.S. indices, the Dow Jones industrial average dropped to its weakest level this year as it lost as much as 177.23 points to finish at 26,439.48. The NASDAQ composite slumped more than 0.5 percent to close at 7,466.51. The S&P 500 edged lower by 0.7 percent to end at 2,853.53.

However, markets on Wall Street all finished on their record highs last Friday. The NASDAQ composite and the S&P 500 jumped by 1 percent, while the Dow added as much as 200 points on the day. This was driven by the good performance of its technology sector.

A strategist from Goldman Sachs suggested that there are possibilities that the market will experience a correction these months to come, even if stocks are off to a good start this year.

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