The US Treasury yield surged to its highest level in more than a decade, scaring investors that higher borrowing rates may further stall the housing market. The stock market fell sharply Tuesday afternoon as a result.

It was the Dow’s lowest close since June, dropping 430 points, or 1.3%, and turning lower for the year. With a 1.4% decline, the benchmark S&P 500 closed at its lowest level since May. Late summer’s selloff extended on the Nasdaq Composite, which fell 1.9%.

The Fed indicated last month that it could raise interest rates one more time this year and keep them elevated through next year. It is becoming increasingly apparent that the housing market could be the next domino to fall, potentially triggering a recession.

In spite of the fact that the Fed does not directly set mortgage interest rates, its actions have an impact on them.The yield on 10-year US Treasury bonds tends to determine mortgage rates.

As AI excitement took hold on Wall Street and drove tech stocks to stratospheric heights this year, stocks have climbed higher for much of the year.

Investors were concerned that a resilient economy and hot labor market would lead the Federal Reserve to maintain higher interest rates for longer to tame inflation in August, but the rally petered out.

A new report from the Bureau of Labor Statistics showed that US job openings unexpectedly surged to an estimated 9.61 million in August, which accelerated yields’ climb on Tuesday. This is higher than July’s upwardly revised estimate of 8.92 million openings and above economists’ consensus estimate of 8.8 million openings.