Dow Rises Moderately, Treasury Yields Jump in Midday Trading

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US equity indexes were up slightly while government bond yields jumped in midday trading on Tuesday as the World Bank cut its global growth forecast a day after Federal Reserve officials reiterated their hawkish views on interest rates.

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The Nasdaq rose 0.3% to 10,666.4, with the S&P 500 up 0.2% to 3,898.2 and the Dow Jones Industrial Average 0.2% higher at 33,569.5. The three indexes were little changed to trading mixed earlier in the session. The utility sector was the steepest decliner, while healthcare was the biggest gainer intraday.

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The US two-year yield jumped 7.5 basis points to 4.27%, and the 10-year yield advanced 11.1 basis points to 3.63%.

Global growth is slowing sharply in the face of elevated inflation, higher interest rates, reduced investment, and disruptions caused by Russia’s invasion of Ukraine, World Bank said in its latest Global Economic Prospects report Tuesday. It expects global growth to slow to 1.7% this year from the 3% expected six months ago.

On Monday, San Francisco Fed President Mary Daly and Atlanta Fed President Raphael Bostic offered “uncharacteristically hawkish sentiment,” suggesting rates not only need to continue to rise but could also remain at the terminal rate for some time, according to a note Tuesday from Stifel.

Meanwhile, the National Federation of Independent Business small business optimism index fell 2.1 points to 89.8 in December, below the consensus view on Econoday for 91.3. December marked the 12th straight month the index has remained below the 49-year average of 98, the association said.

West Texas Intermediate futures rose 1.3% to $75.61.

In company news, Goldman Sachs adjusted its price target on Netflix (NFLX) to $225 from $200, while maintaining its sell rating. Shares of the entertainment company rose 3.4%, the second-biggest gainer on the Nasdaq.

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