US Treasury Yields Surge, Tech Stocks Fall... Volatile European Markets

Euro Stoxx 50, All Equipment Down 1.57%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cha Min-young] Major European stock markets are down over 1% intraday as U.S. Treasury yields surge and global inflation concerns spread.

As of 10:03 PM on the 6th (Korean time), the Euro Stoxx 50 index is down 1.57% from the previous close, standing at 4001.50. The index briefly fell below the 4000 mark earlier in the session but has since recovered.

At the same time, Germany's DAX index is down 1.67% at 14,941.45, the UK's FTSE 100 index is down 1.19% at 6993.02, and France's CAC 40 index is down 1.65% at 6467.60.

The U.S. 10-year Treasury yield surpassed 1.56% again today, reaching its highest level in three and a half months. This reflects growing concerns that inflationary pressures may persist for some time.

As bond yields rise, the attractiveness of stock market investments declines in return. CNBC explained, "As bond yields increase, investors are avoiding tech stocks as well," adding, "Higher interest rates make future earnings less attractive."

With the recent sentiment that U.S. tapering (asset purchase reduction) is approaching, major central banks are preparing to enter 'tightening mode' in anticipation of interest rate hikes.

European economic indicators are also weak. Germany's industrial orders in August fell more sharply than expected due to weakening overseas demand. Spain's industrial production in August increased by 1.8% year-on-year but fell significantly short of the market consensus forecast of 3.5%. European retail sales in August rose 0.3% month-on-month, below experts' expectations of a 0.8% increase.

CNBC noted, "European stock market investors are likely to focus on economic data that indicate the health of the U.S. economy, including the upcoming Automatic Data Processing (ADP) private payroll report for September."

This content was produced with the assistance of AI translation services.