Why Shares in Ford Slumped Today
Shares in vehicle maker Ford Motor Company (NYSE: F) were down by more than 6% as of midday Monday. The move follows news that China is reimposing COVID-19 restrictions after recently relaxing them and the rise in interest rates in response to a disappointing inflation report on Friday.
Given the importance of China to global auto supply chains, it's no surprise that the market decided to sell off. The news is doubly disappointing after Friday's consumer price index report, which showed year-over-year consumer price inflation running hot at 8.6% in May.
In response to the inflation report and the news from China, the market took the benchmark U.S 10-year Treasury yield up to 3.3% -- for reference, it started the year at 1.76%. The higher interest rates are, the more expensive it is to borrow money to finance buying large-ticket items like housing and automobiles.
Source Fool.com
