Market Shake-Up: Wall Street's One-Day Slide Stuns Investors

Wall Street indexes experienced their largest one-day drop in a month, dragging down global equities. Rising U.S. Treasury yields followed hawkish Federal Reserve comments, reducing the likelihood of a December rate cut. The reopening of the U.S. government was overshadowed by investor concerns over economic clarity and inflation.

In an unexpected turn, Wall Street indexes witnessed their steepest one-day decline in recent weeks on Thursday, which sent ripples through global equities. U.S. Treasury yields climbed amid hawkish statements from Federal Reserve officials, dampening hopes of a December interest rate cut.

The market reaction comes despite the U.S. government's reopening after its longest shutdown in history. Investors initially had high hopes of an economic recovery, but officials cast doubt, stating crucial economic data might not be readily available. The Federal Reserve's cautious commentary on inflation and economic pressure has investors on edge.

Amidst these developments, significant declines marked the Nasdaq Composite, Dow Jones Industrial Average, and S&P 500, with all three leading Wall Street's largest drops since earlier in the month. Meanwhile, the dollar fell as currency traders assessed the shutdown's impact, and European officials considered reducing their dependency on U.S.-centric financial systems.

(With inputs from agencies.)