Wall Street Turmoil: Megacaps Slump as Treasury Yields Rise

Wall Street experienced a downturn led by megacap stocks amid rising U.S. Treasury yields. Investor sentiment was affected by uncertain prospects for Federal Reserve rate cuts and corporate news from McDonald's and Coca-Cola. Key technology stocks and the broader Consumer Discretionary sector saw significant declines, with volatility expected to persist.

Wall Street witnessed a sharp decline on Wednesday, primarily driven by a fall in megacap stocks as U.S. Treasury yields soared, casting doubts on the likelihood of aggressive Federal Reserve rate cuts. Corporate developments compounded the market's woes, notably impacting industry giants McDonald's and Coca-Cola.

U.S. Treasury yields for 10-year notes hit a three-month peak as investors revisited expectations for the Fed's monetary policy amid robust economic data and imminent presidential elections. 'The market's focus is notably on the rise in rates,' stated Thomas Martin of Globalt Investments, highlighting increasing market uncertainties tied to the electoral race.

Besides megacaps like Nvidia and Apple, which significantly impacted the tech-heavy Nasdaq, McDonald's was hit by an E. coli outbreak linked to its products, and Coca-Cola faced scrutiny over its profit forecasts. Despite positive earnings reports from companies like Texas Instruments and AT&T, overall market sentiment remains fragile, with upcoming earnings and macroeconomic factors likely affecting future stability.

(With inputs from agencies.)