Dow Dips Around 400 Points As Treasury Yields Top 4%: Investor Optimism Declines, But Fear Index Remains In 'Greed' Zone

The CNN Money Fear and Greed index showed a decline in the overall market sentiment, but the index remained in the “Greed” zone on Monday.

U.S. stocks settled lower on Monday, with the Dow Jones index dipping around 400 points during the session amid higher Treasury yields. The benchmark 10-year Treasury yield topped 4% for the first time since August.

Data released Friday showed the U.S. economy added 254,000 jobs in September, compared to a revised 159,000 gain in August, and topping market estimates of 147,000. The unemployment rate declined to 4.1% in September from 4.2% in the previous month. U.S. stock recorded gains last week, with the S&P 500 gaining 0.22% and the Dow adding 0.09%. The Nasdaq, meanwhile, added 0.1% last week.

The Federal Reserve will release minutes from its recent meeting on Wednesday, while data on the consumer price index will be released on Thursday.

Most sectors on the S&P 500 closed on a negative note, with consumer discretionary, utilities, and communication services stocks recording the biggest losses on Monday. However, energy stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 399 points to 41,954.24 on Monday. The S&P 500 fell 0.96% to 5,695.94, while the Nasdaq Composite dipped 1.18% to close at 17,923.90 during Monday's session.

Investors are awaiting earnings results from PepsiCo, Inc. PEP and Accolade, Inc. ACCD today.

What is CNN Business Fear & Greed Index?

At a current reading of 70.5, the index remained in the “Greed” zone on Monday, versus a prior reading of 73.6.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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