After the 1,300-point drubbing the Dow Jones Industrial Average experienced in the last two trading sessions, investors were quick to point fingers at a number of factors contributing to the steep loss, such as rising interest rates. However, history shows that investors shouldn’t fret when rates are rising because these moves are marked by subsequent gains in the major indexes.
“Since 2010, the 10-year yield has jumped by at least 25 basis points in a 30-day period 14 times,” CNBC’s George Manessis noted. “During these moves, the markets tend to move significantly higher: with the Dow, S&P and Nasdaq all gaining much better than 3 percent – the three trading positively 86 percent of the time.”
Benchmark Treasury yields continued their upward trajectory with the 10-year yield rising to 3.163, while the 30-year rose to 3.336. Shorter duration bond yields also went higher with the three-month note ticking up to 2.271, the two-year to 2.857 and the five-year to 3.017 as of 12:45 p.m. ET.
This, however, was paired with a rise in the Dow, which pared its losses from the previous sessions by over 300 points before settling to a gain of 100 points at the time of this writing.