The S&P 500 fell on Wednesday, putting the benchmark index on track for a third straight day, as Treasury yields continued to rise.
The broad market index slipped 0.3%, while the Nasdaq Composite fell 0.5%. The Dow Jones Industrial Average slumped, losing 287 points, or nearly 0.7%.
The decline in stocks is affected by the increase in interest rates. The yield on the 10-year Treasury note rose 3 basis points to 4.23%, reaching its highest level since July.
Higher yields put pressure on the S&P 500 and Dow on Tuesday, with both indexes closing slightly lower on the day. However, the Nasdaq rose around 0.2%.
Strong economic data and deficit concerns were among the factors behind the rise in 10-year Treasury yields despite a half-point rate cut from the Federal Reserve in September. Traders are also increasingly concerned that central bank policymakers may be less inclined to cut rates, even though the Fed has forecast an additional half-point cut before the end of the year.
Still, the backdrop for equities is still considered positive, according to Jeff deGraaf, head of technical research at Renaissance Macro Research.
"The trend is still positive and we don't have huge short-term momentum, but that's not a bad ending," deGraaf said. "In fact, it often results in good preparation because it is a strengthening phase."
