The deepening Treasury sell-off triggered another sell-off on Wall Street on Tuesday, wiping out the Dow's remaining gains for the year and pushing US Treasury yields to fresh multi-year highs.
Stocks fell broadly, led by riskier technology companies, rate-sensitive banks, real estate owners and consumer discretionary stocks. Utilities were the only S&P 500 sector to rise. Utilities rose 1.2 per cent, following Monday's sharp decline.
The Dow fell about 431 points, or 1.3%, on Tuesday and is down 0.4% so far this year. The S&P 500 fell 1.4 per cent, with nearly 13 per cent of its components hitting 52-week lows. The tech-heavy Nasdaq Composite index fell 1.9 percent.
Meanwhile, the yield on the 10-year Treasury note topped 4.8% for the first time since August 2007, closing at 4.801% on Tuesday. The 2-year yield rose to 5.148 per cent, while the 30-year yield rose to 4.936 per cent.
On Tuesday, stock splits of two companies that went public for the first time this week led the market lower.
Investors continued to dump Kellogg shares after breakfast cereal maker WK Kellogg Co. (KLG) spun off its snack business into a separate publicly traded company, Kellanova Co. (K), sending the stock down 16% and 23% over the past two sessions.
Kellogg is down 23% in the past two trading days after spinning off its retail business. Shares of Kellanova, the snack company that spun off to sell Pringles and Rice Krispies Treats, have fallen 5.1 percent since going public.
Veralto Corp. (VLTO), the environmental business spun off from life sciences company Danaher Corp. (DHR), fell 9.5%.
Another big loser was spice company McCormick & Co. Inc., MKC), which reported fiscal third-quarter sales that disappointed investors, sending its shares down 8.5%. The maker of Cholula hot sauce and French's mustard blamed the decline on a slower-than-expected economic recovery in China, as well as the company exiting its business in Russia and selling off lower-margin units.
The Stoxx Europe 600 index fell 1.1 percent.