Dow Jones industrials sink 700 points as bond yields rise

Dow falls 500 points as rising Treasury yields drag down market

USA stocks posted their worst loss since February on Wednesday, the Dow Jones industrial average finishing the day down more than 800 points.

Trump on Wednesday strongly criticized the Fed for tightening rates, again signaling that he wanted interest rates to remain low. The Russell 2000 index of smaller-company stocks fell 30.03 points, or 1.9 percent, to 1,545.38.

But Hogan said earnings were also a source of worry because they could showcase the consequences of Trump's trade wars for United States companies, from raising costs of raw materials to forcing enterprises to change supply chains.

Bond prices rose as the recent surge in yields attracted the attention of some investors. "I think the Fed is out of control", the president said to reporters in the Oval Office.

The Nasdaq fell 92 points, or 1.3 percent, to 7,329.06. It has climbed 27.5 percent since Donald Trump was elected, and is still up 2.1 percent in 2018. But higher interest rates can slow economic growth and erode corporate profits.

Major equity indexes in Europe fell more than 1.0 percent, also pulled down by technology shares, and gold prices inched up as some investors sought refuge in the metal.

The 10-year Treasury yield rose to 3.22 percent from 3.20 percent late Tuesday after earlier touching 3.24 percent.

Asia stock indexes added to the global market's pain on Thursday, with benchmarks in Shanghai, Shenzhen and Tokyo all skidding between 4 and 5 percent.

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After hitting an intraday high of 28.84, the CBOE Volatility Index, popularly known as the "fear gauge", ended the day up 2 points at 24.98, its highest close since February 12.

Earnings season kicks off with reports from JPMorgan Chase, Citigroup and Wells Fargo. Amazon dropped another 2% to $1,719.36 and Apple fell 0.9% to $214.45.

Technology and retail companies continued to stumble. Over the past two days, it has lost more than 1,300 points. Microsoft and Alphabet, Google's parent company, were little changed.

The moves come as positive economic data - including the unemployment rate standing at 3.7 percent, its lowest level since 1969 - stoked investor fears that the Federal Reserve would raise rates aggressively to prevent the economy from overheating.

The renminbi had fallen "significantly" during the year and the Treasury Department is monitoring this "very carefully" to make sure China wasn't manipulating its currency to gain an advantage in the trade war, Mnuchin told the Financial Times in an interview. The Nasdaq composite rose 15 points, or 0.2 percent, to 7,436. Wholesale gasoline, heating oil and natural gas also declined.

The dollar slipped to 112.17 Japanese yen from 112.27 yen late Wednesday.

Mona Mahajan, US investment strategist at Allianz Global Investors, said: "The market is digesting the potential that rates moving upwards eventually seep into the real economy in the form of mortgage rates, auto rates, student lending rates".

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