NEW YORK, N.Y. (AP) - The Dow Jones Industrial Average sank 800 points after the bond market flashed a warning sign about a possible recession for the first time since 2007.
New York Stock Exchange trading floor on August 22, 2018. An economic alarm bell is sounding in the U.S. and sending warnings of a potential recession. Yields on 2-year and 10-year Treasury notes inverted early Wednesday, Aug. 14, a market phenomenon that shows investors want more in return for short-term government bonds than they are for long-term bonds. (Source: Sarah Yookyung Kim / CC BY-SA 2.0)
The yield on the 10-year Treasury briefly dropped below the two-year yield Wednesday, an ominous signal that has predicted past recessions.
Investors have been plowing money into long-term U.S. government bonds for months, sending yields sharply lower, as they anticipate slower economic growth.
Macy's plunged 13% after slashing its full-year profit forecast.
The Dow Jones Industrial Average fell 800 points, or 3%, to 25,479.
The S&P 500 lost 85 points, or 2.9%, to 2,840. The Nasdaq lost 242 points, or 3%, 7,773.
Bond prices soared. The yield on the 10-year Treasury sank to 1.58% from 1.68% Tuesday, a big move.
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