US Stocks Fall as Bond Yields Rise

(AP) -- Stocks were mostly lower in the early going Thursday as the recent theme of the market -- rising bond yields and falling prices of technology companies -- continued to weigh on trading.

Shares of companies embraced by online retail investors earlier this year were sharply higher, including GameStop, which surged 50%.

The S&P 500 index fell 0.2% as of 9:50 a.m. Eastern. The Dow Jones Industrial Average also dropped 0.2%, and the Nasdaq Composite was down 0.3%.

Once again it was the bond market that was driving the stock market's direction and investors' moods. The yield on the 10-year U.S. Treasury note rose to 1.48%, a level not seen in more than a year and far above the 0.92% level it was trading at only two months ago. That indicated investors were moving money out of bonds, a sign they higher inflation and economic growth.

Global stock markets have soared over the past six months on optimism about coronavirus vaccines and central bank promises of abundant credit to support struggling economies. Those sentiments have faltered due to warnings the rally might be too early and that inflation might rise.

On Wednesday, Federal Reserve Chair Jerome Powell affirmed the Fed's commitment to low interest rates in a second day of testimony to legislators in Washington.

The central bank earlier indicated it would allow the economy to run hot to make sure a recovery is well-established following its deepest slump since the 1930s. Powell said it might take more than three years to hit the Fed's target of 2% inflation.

Investors also are looking for Congress to approve President Joe Biden's proposed economic aid plan. That includes $1,400 checks to most Americans. However, the plan faces staunch opposition from Republicans and is still subject to negotiations. Democrats have chosen to use the legislative process known as reconciliation that would allow them to pass the bill without GOP support.

After being out of the news for a few weeks, the stocks embraced by large group of active retail traders on messaging boards like Reddit were surging once again. GameStop's jump in early trading Thursday came after its share price more than doubled in the last hour of trading Wednesday. AMC Entertainment was on track for a fourth straight day of sharp increases Thursday.