Wall Street tumbles under the weight of rising Treasury yields and US debt worries

NEW YORK (AP) — Wall Street slumped on Wednesday under the weight of pressure from the bond market, where Treasury yields climbed on worries about the U.S. government’s spiraling debt and other concerns.

The S&P 500 fell 1.6% for a second straight drop after breaking a six-day winning streak. The Dow Jones Industrial Average lost 816 points, or 1.9%, while the Nasdaq composite sank 1.4%.

Stocks had been drifting only modestly lower early in the day, after Target and other retailers gave mixed forecasts for upcoming profits amid uncertainty caused by President Donald Trump’s trade war. The market then turned sharply lower after the U.S. government released the results for its latest auction of 20-year bonds.

The government regularly sells such bonds, which is how it borrows money to pay its bills. In this auction, the U.S. government had to pay a yield as high as 5.047% to attract enough buyers to lend it a total of $16 billion over 20 years.

That helped push up yields for all kinds of other Treasurys, including the more widely followed 10-year Treasury. Its yield climbed to 4.59% from 4.48% late Tuesday and from just 4.01% early last month. That’s a notable move in the bond market.

“Bonds finally appear to be getting equities’ attention,” according to Jonathan Krinsky, chief market technician at BTIG, pointing in particular to the 30-year Treasury yield, which jumped back above 5% and approached its highest level since 2023.

Treasury yields have been on the rise in part because of concerns that tax cuts currently under consideration in Washington could pile trillions of more dollars onto the U.S. government’s debt. Concerns are also still brewing about how much Trump’s tariffs will push up on inflation in the United States.

The U.S. government’s bonds aren’t alone, and yields have been on the rise recently for developed economies around the world. That’s partly because their governments are continuing to borrow more cash to pay their bills, while central banks like the Federal Reserve have cut back on their own holdings of government bonds.

When the U.S. government has to pay more interest to borrow money, that can cause interest rates to rise for U.S. households and businesses too, including for mortgages, auto loans and credit cards. That in turn can slow the economy. Higher yields can also make investors less inclined to pay high prices for stocks and other kinds of investments.

Moody’s Ratings became the last of the three major ratings agencies late last week to downgrade the U.S. government’s credit rating on concerns that it may be heading toward an unsustainable amount of debt.

“We do not think that the downgrade matters by itself,” Bank of America strategists wrote in a BofA Global Research report, “but it has served as a wake up call for those investors who had been ignoring the ongoing fiscal discussion.”

On Wall Street, Target sank 5.2% after the retailer reported weaker profit and revenue than analysts expected for the start of the year.

The company said it felt some pain from boycotts by customers. It scaled back many diversity, equity and inclusion initiatives early this year following criticism by the White House and conservative activists, which drew its own backlash. Perhaps more worryingly for Wall Street, Target also cut its forecast for profit over the full year.

Carter’s, which sells apparel for babies and young children, sank 12.6% after cutting its dividend.

CEO Doug Palladini said the company made the move in part because of investments it anticipates making in upcoming years, as well as the possibility that it “may incur significantly higher product costs as the result of the new proposed tariffs on products imported into the United States.”

All told, the S&P 500 fell 95.85 points to 5,844.61. The Dow Jones Industrial Average fell 816.80 to 41,860.44, and the Nasdaq composite dropped 270.07 to 18,872.64.

A growing number of companies have recently said tariffs and uncertainty about the economy are making it difficult to guess what the upcoming year will bring. Others, including Walmart, have said they’ll have to raise prices to offset Trump’s tariffs.

U.S. stocks had recently recovered most of their steep losses from earlier in the year after Trump delayed or rolled back many of his stiff tariffs. Investors are hopeful that Trump will lower his tariffs more permanently after reaching trade deals with other countries.

In stock markets abroad, indexes were mixed amid mostly modest movements across Europe and Asia

London’s FTSE 100 rose 0.1% after a report said inflation in the United Kingdom spiked to its highest level for more than a year in April. Tokyo’s Nikkei 225 fell 0.6% after a report said Japan’s exports have slowed due to tariffs

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

Trader Michael Conlon works on the floor of the New York Stock Exchange, Tuesday, May 20, 2025. (AP Photo/Richard Drew)

Specialist Joseph Maguire works at his post on the floor of the New York Stock Exchange, Tuesday, May 20, 2025. (AP Photo/Richard Drew)

The logo for Target is displayed above a trading post on the floor of the New York Stock Exchange, Tuesday, May 20, 2025. (AP Photo/Richard Drew)

Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI), top center left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, May 21, 2025. (AP Photo/Ahn Young-joon)

The logo for Lowe's is displayed above a trading post on the floor of the New York Stock Exchange, Tuesday, May 20, 2025. (AP Photo/Richard Drew)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, May 21, 2025. (AP Photo/Ahn Young-joon)

The logo for Home Depot is displayed above a trading post on the floor of the New York Stock Exchange, Tuesday, May 20, 2025. (AP Photo/Richard Drew)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won, top right, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, May 21, 2025. (AP Photo/Ahn Young-joon)

LONDON (AP) — Thousands of homes and businesses across northern France and southern England were without power Friday morning and residents faced widespread travel delays after a storm swept in off the Atlantic, bringing high winds, rain and snow to the region.

The low-pressure system, named Storm Goretti, pummeled the Isles of Scilly overnight with wind gusts up to 99 mph (159 kph) recorded in the archipelago off the southwestern tip of England. Local government officials reported blocked roads, unstable buildings and power outages that left some people without water.

More than 57,000 were without power across southwestern England, the Midlands and Wales, according to National Grid, which runs the country’s electricity transmission network.

As the storm moved across the United Kingdom it collided with an existing mass of Arctic air, bringing snow to northern areas and heavy rain to the south.

That extended the misery in northern Scotland, where snowplows have been working overtime to keep roads open after more than half a meter (20 inches) of snow fell earlier in the week. More than 250 schools across Scotland were closed on Friday, with some remaining shut for a fifth straight day.

National Rail warned people across the U.K. to check before traveling because the storm had disrupted services across England, Scotland and Wales. Birmingham Airport, which closed briefly due to snow, said had reopened with “reduced runway operations.”

The disruptions came after the Met Office, Britain’s national weather service, issued a rare red weather warning — its highest — in southwestern England for Thursday evening.

Red warnings are issued when the forecaster considers it “very likely” there will be life-threatening conditions.

Strong winds from Storm Goretti also battered northwestern France on Friday.

No major damage was reported, but some 320,000 homes were still without power at midday, down from 380,000 earlier, national power grid operator Enedis said. Most of the outages were concentrated in the Normandy region.

France’s national weather service, Météo-France, had issued weather warnings ahead of the storm, urging residents to remain home. An overnight wind gust of up to 213 kph (132 mph) was recorded in Gatteville-le-Phare in Normandy.

Regional train services were suspended across northwestern France, with disruptions expected to last at least until Friday afternoon. High-speed rail services were operating, and authorities said they anticipated minimal impact on flights at Paris airports.

People cross the medieval Charles Bridge during a heavy snowfall in Prague, Czech Republic, Friday, Jan. 9, 2026. (AP Photo/Petr David Josek)

A man clears snow from a walking path during a heavy snowfall in Prague, Czech Republic, Friday, Jan. 9, 2026. (AP Photo/Petr David Josek)

Vehicles covered in snow are parked in Dowlais, near Merthyr Tydfil, Wales, Friday, Jan. 9, 2026, as Storm Goretti continues in the UK. (Ben Birchall/PA via AP)