Dow Jones Industrial Average dropped 2.5%
The Dow Jones Industrial Average dropped 2.5%, its biggest one-day decline since the U.K.’s surprise vote to leave the European Union in June 2016. Meanwhile, the yield on the benchmark 10-year Treasury note climbed to 2.852%, its highest level since January 2014. It is worth noting that it still remains higher than it was on 1 January 2018. According to The Wall Street Journal, bond investors have started to take the threat of inflation more seriously, and an anticipated rise in interest rates spooked stock investors. According to WSJ, many investors still expect the stock market to remain strong due to a brightening earnings picture. Analysts’ projections for U.S. earnings in 2018 have been upgraded significantly over the past month following changes to the U.S. tax code, while results for the fourth quarter have largely exceeded analysts’ expectations.