Dow drops 500 points, heads for worst day in over a month: Live updates

Stocks fell sharply on Wednesday, with the Dow Jones Industrial Average on pace for its worst day in over a month, as higher Treasury yields weighed on market sentiment.

The 30-stock Dow shed 617 points, or 1.4%. That put the benchmark on track for its biggest one-day loss since Sept. 3 — when it lost 1.5%. The S&P 500 dropped 1.5%. The Nasdaq Composite lost about 2.3%.

Both the Dow and S&P 500 were headed for their third straight losing session.

At its session high, the benchmark 10-year Treasury yield topped 4.25%, reaching its highest level since July 26. The 10-year note is up 44 basis points in October alone.

Treasury yields have been soaring over the past month, even after the Federal Reserve began cutting interest rates in September. Some have pointed to recent economic data as a source for the move higher, while others have noted the potential of growing fiscal deficits in the U.S. under a second Donald Trump presidency.

“To me, it’s all about the impact of higher rates. The market is repricing the probability that the Fed can aggressively cut rates,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. “There have been parts of the economy that haven’t felt the impact of rising interest rates yet, but the longer rates remain higher, the more different parts of the economy have to reprice to that reality … the economy is out of equilibrium.”

The most overvalued part of the U.S. equity market is large caps, he said, adding that he believes the market is due for a pullback in the near term as recession risks linger. Megacap stocks were under pressure Wednesday, with Apple and Nvidia shares losing 3% to lead the way lower. Apple was headed for its worst day since Aug. 5 — when it shed 4.8%. Meta, Netflix and Amazon were also down more than 2%.

Dow member McDonald’s fell more than 4% on Tuesday after the U.S. Centers for Disease Control and Prevention said an E. coli outbreak tied to the fast-food giant’s Quarter Pounder burgers has resulted in 10 hospitalizations and one death. McDonald’s accounted for more than 100 points of the decline in the Dow.