US stocks ended lower on Monday amid turmoil over the reaction to the UK’s new budget plan, which includes some of the steepest tax cuts in a decade and led to fears of worsening inflation and government budget deficits.
Britain sent markets into turmoil earlier in the day as the pound fell to a record low against the US dollar. Investors fear that UK tax cuts could add to already sticky inflation and increase the government’s budget deficit, hampering Britain’s recovery from current economic headwinds.
Tech stocks fell sharply, the Nasdaq rose in the afternoon before falling again as U.S. bond yields rose. The yield on 10-year government bonds jumped by 21 basis points to more than 3.9%.
Here are the US indices as the market closed at 4.30pm on Monday:
- S&P 500: 3,655.04, down 1.03%
- Dow Jones Industrial Average: 29,260.81, down 1.11% (329.60 points)
- Nasdaq Composite: 10,802.92, down 0.6%
Here’s what’s happening today:
- After recovering from early losses, the pound fell again on Monday following comments from the Bank of England.
- Jeremy Siegel thinks the risk of the Fed overshooting the inflation mark is less serious than the potential shocks from raising interest rates.
- Elsewhere, Russian crude destined for Asia climbed to a five-week high, while Iranian exports fell below the Kremlin.
For commodities, bonds and cryptocurrencies:
- Oil fell, with West Texas Intermediate down 2.5% to $76.78. Brent crude, the international benchmark, fell 2.51% to $83.97.
- Gold ended 0.93% lower at $1,627.62 an ounce. The 10-year yield retreated slightly from Monday’s highs, jumping 18.3 basis points to 3.88%.
- Bitcoin fell 0.01% to $19,167.41.