10-year yield falls below 4% on stagflation risk following hot producer prices reading

Economic Indicators - U.S. Treasury yields fell as investors reacted to a stronger-than-expected January wholesale inflation report, with core wholesale prices rising 0.8% in January, significantly above the anticipated 0.3% increase [2] - The headline reading, including all price components, increased by 0.5%, again higher than the expected 0.3% gain, indicating persistent inflationary pressures [3] Market Reactions - The Dow Jones Industrial Average dropped 700 points, or 1.5%, prompting investors to seek safety in bonds, which led to a decrease in yields [4] - Concerns over artificial intelligence disrupting the job market have negatively impacted investor sentiment, particularly affecting software stocks, with the iShares Expanded Tech-Software Sector ETF (IGV) falling over 10% this month and nearly 30% from its recent high [4] Corporate Developments - Block announced layoffs of more than 4,000 employees, approximately half of its workforce, raising fears of potential layoffs across the sector [5] - Uncertainty surrounding President Trump's tariff policies and military tensions with Iran are contributing to market instability [5]