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)

BALTIMORE (AP) — A year ago, Kyle Stowers was shuffling back and forth between Triple-A Norfolk and Baltimore while trying to establish himself as an everyday major leaguer.

Stowers was forced to continue that quest in Miami after being traded by the Orioles last July 30. Unfortunately, success remained elusive as the overwhelmed rookie strived to adjust to a new environment and big league pitching.

This season, however, everything has clicked for the blond, blue-eyed outfielder. It started on opening day, when he singled in the winning run in the bottom of the ninth against Pittsburgh.

And so, when Stowers returned to Baltimore with the Marlins on Friday, he did so as a member of the NL All-Star team.

“I'm very comfortable in this ballpark. It’s where I debuted. I hit my first home run here," Stowers said before the start of a three-game series between two sub-.500 teams. "Lot of special moments. I guess I shouldn’t say a lot. A few special moments.”

Drafted by Baltimore in the second round of the 2019 amateur draft, Stowers hit .229 over parts of three seasons with the Orioles. Then, with Baltimore looking for pitching to mount a playoff run, Stowers was sent to Miami with infielder Connor Norby for lefty Trevor Rogers.

Stowers batted .186 in 50 games with the Marlins after the trade. This season, however, he has flourished.

“He has made some adjustments,” Orioles interim manager Tony Mansolino said. “The big leagues will expose your holes, and then it’s a sink or swim scenario. He’s swimming.”

While the Marlins tinkered with Stowers' swing, the 27-year-old overhauled his fear-of-failure attitude.

“I just feel like I’ve learned how to not put pressure on myself,” Stowers said. “I kind of realized that I’m the one person in my life who wouldn’t be OK with me not having the baseball career I should have. I have a multitude of people that love and care about me regardless of what happens on the baseball field. I just kind of leaned on that, and my faith in God.”

Stowers came to town batting .279 with 16 homers and 48 RBIs. Only one player on the Orioles has a better batting average, and no one on the team has as many long balls or RBIs.

“Opening night, getting a walk-off hit was a great start,” Marlins manager Clayton McCullough said. "The one moment that stands out for me was the walk-off grand slam he hit off (2024 All-Star closer) Mason Miller (on May 3). Premium velocity at the top of the strike zone, which is something that is well-documented that Kyle has struggled with in the past.

“But the adjustments he made to be able to get to that pitch, that was a big one for us and a big one for Kyle.”

McCullough hopes Stowers and Norby can savor their return to Baltimore this weekend, beyond merely socializing with old friends.

“Come back and enjoy this,” the first-year manager said. “It’s cool in a lot of ways to come back and see former teammates and coaches that you spent time with and were part of your growth as a young player. Embrace that. That’s why guys come out and do a lot of cool things against their former teams. I hope that happens for us in this series.”

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Miami Marlins' Kyle Stowers (28) passes third base coach Blake Lalli (45) after hitting a solo home run during the third inning of a baseball game against the Milwaukee Brewers, Saturday, July 5, 2025, in Miami. (AP Photo/Lynne Sladky)