Richard Drew/AP
- US stocks dropped on Tuesday after Treasury yields once again hit a new cycle high.
- The 10-year yield jumped to a high of 4.75%, which is well above the 3.64% level it was at a year ago.
- Higher bond yields have led to increased competition for stocks as investors can grab a risk-free yield of 5%.
US stocks fell on Tuesday after interest rates surged to a new cycle high, with the 10-year Treasury yield jumping to 4.75%, the highest since August 2007.
The latest surge comes a day after Cleveland Fed President Loretta Mester said that one more rate hike might be necessary later this year. The market currently expects no hikes at the Fed's upcoming November and December meetings, so any further increases would be a surprise to investors.