(CNBC) — U.S. stocks dropped Tuesday as higher rates continue to pressure market sentiment, and the latest batch of retail earnings raised concern about the state of the consumer.
The Dow Jones Industrial Average dropped 696 points, or 2.0%, its worst downturn since Dec. 15, when it fell 2.3%. The S&P 500 slid 2.0%, marking its worst day since Dec. 15, when it fell 2.5%. All sectors ended lower, with discretionary stocks seeing the largest decline of 3.2%. The tech-heavy Nasdaq Composite pulled back by 2.5%.
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The benchmark 10-year Treasury yield climbed to 3.9%, while the 2-year rate advanced to 4.7%. Both rates also reached levels not seen since November, as traders grappled with hotter-than-expected inflation data. Traders are worried that stubborn inflation will lead the Federal Reserve to keep rates higher for longer — which could tip the economy into a recession.
