A narrowing spread between 2-year and 10-year Treasury yields is fueling recession concerns, dragging down financial and utility stocks despite broader market resilience.
Financial stocks fell 1.8% and are erasing yearly gains as a flatter yield curve hurts bank lending margins.
S&P 500 is near record highs but faces yield-curve warnings; Wells Fargo targets 7,800-8,000.
Utilities are down 4.8% year-to-date, pressured by capital-intensive business models and higher rates.
Brent crude around $100 is fueling inflation and rate-hike bets, but Goldman expects a retreat to $85 by December.
Nasdaq Composite is near record highs but has underlying weakness as rate-hike worries persist.
The U.S. Treasury yield curve has flattened to just 22 basis points, signaling potential economic headwinds as the Federal Reserve prepares for further rate hikes. While the S&P 500 and Nasdaq remain near record highs, financial and utility sectors are struggling under the pressure of rising interest rates and energy costs.
A flattening or inverted yield curve is often viewed as a harbinger of recession, as it suggests that investors expect lower long-term growth and potentially lower interest rates in the future.