Major indices are lower as rising Treasury yields pressure the market’s largest components. Although recent moves in some semiconductor names are helping the market to recover from earlier lows.

Consumer Discretionary (XLY) and Communication Services (XLC) are two of the worst performing sectors amid continued weakness across mega-cap stocks. Health Care (XLV) outperforms by a wide margin as investors rotate out of hot stocks.

Rising rates contribute to pressure in Materials (XLB) and Industrials (XLI). Materials (XLB) is marking its 6^th straight losing session. This is the largest consecutive drop since 2024.

Treasury yields continue to rise amid concerns of inflation, driving borrowing costs sharply higher across the yield curve. The 30-year yield rose 3 basis points to 5.18%, hitting its highest level since July 2007. 

With this, the odds of the Fed hiking interest rates in 2026 surged to a new high of 37%.

On the economic front, pending homes continue their bounce from January’s lows. The index in April rose by 1.4% MoM and rose 3.25% YoY.