Investing.com – Wall Street fell on Wednesday as fears of a recession sent investors flocking to the perceived safety of the bond market.
The flight to safety triggered further technical warning signals, as long-term bond yields fell further below short-term ones. The so-called inversion of the Treasury yield curve is widely considered a precursor to a recession, although it is historically not an infallible signal.
The Dow slumped 102 points or 0.4% by 9:40 AM ET (13:40 GMT), while the S&P 500 fell 12 points or 0.4% and the Nasdaq composite was down 54 points or 0.7%.
Shares of banks were down as the collapse of long-term rates squeezed their ability to make money on "maturity transformation" - the practice of borrowing short-term money and lending it out for longer terms at higher rates.
Goldman Sachs (NYSE:GS) fell 0.4%, while JPMorgan Chase (NYSE:JPM) was down 0.5% and Bank of America (NYSE:BAC) slipped 0.8%.
Software company Autodesk (NASDAQ:ADSK) slumped 12% after it slashed its full-year earnings forecast, while Tiffany & Co (NYSE:TIF) fell 2% after worldwide net sales and same-store sales declined due to lower tourist spending.
Hewlett Packard Enterprise (NYSE:HPE) jumped 5% after it raised its full-year guidance, while Costco (NASDAQ:COST) rose 1.4% after its first store opening in China attracted unmanageably large crowds.
In commodities, crude oil jumped 2.5% to $56.30 a barrel after the American Petroleum Institute reported U.S. crude inventories fell by 11.1 million barrels last week, much more than the 2.1 million drop expected for the official government data that are due later. The U.S. dollar index, which measures the greenback against a basket of six major currencies, rose 0.1% to 98.047 and gold futures gained 0.1% to $1,552.65 a troy ounce.