Here's what debt showdown could mean for markets

New York (CNN Business)Wall Street went into reverse around midday Thursday, with the Dow falling 400 points on the final trading day of the month and the quarter.

Stocks have been extremely choppy in September, as investors grappled with an abundance of issues: high inflation expectations, rising bond yields, the pace of the economic recovery, America’s debt ceiling and China’s corporate debt levels.
Major indexes on Wall Street opened higher on Thursday but couldn’t hold onto their gains. Around midday, the Dow (INDU) traded 1.2%, or about 400 points, lower, while the S&P 500 (SPX) was down 0.7%.

    The tech-heavy Nasdaq Composite (COMP) was down only 0.1% as the losses were led primarily by financials and consumer stocks.

      All three indices are looking at their worst monthly performance of this year.

      As for the S&P 500, it’s shaping up to be its worst month since the start of the pandemic. The Dow and the Nasdaq are looking at their worst month since October and September last year, respectively.
      Stocks last sold off Tuesday after Federal Reserve Chairman Jerome Powell told lawmakers that high inflation could stay around for a while longer.

        US Treasury bond yields, which are sensitive to inflation forecasts because they track interest rate expectations, jumped earlier in the week. On Thursday, the 10-year government bond edged slightly lower to yield 1.52%. Bond prices and yields move in opposition to each other.
        Also Thursday, Powell and Treasury Secretary Janet Yellen are back in front of Congress, testifying about the coronavirus crisis and policy responses to it.
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