10-year Treasury yield leaps to fresh 19-year high after hot economic readings
- On Wednesday, the Dow slid 443.87 points or 0.9 percent to 50,906.05 and the S&P 500 fell 19.30 points or 0.3 percent to 7,651.54, though the benchmark index remains about 1% below its August all-time high.
- Rising oil prices up about 14% and a ten-year Treasury yield reaching 5.26% on September 29—its highest level since 2002—pressured most sectors after Fed Chair Kevin Warsh's late August Jackson Hole address prompted hawkish rate expectations.
- Morgan Stanley analysts reported that S&P 500 stocks trading above their 200-day moving average fell to 49% from roughly 75% over the summer, while nearly three-quarters of benchmark stocks declined in September as leadership concentrated.
- Gains in Apple, Nvidia, Alphabet, Microsoft and Meta Platforms masked broader weakness, with the VanEck Semiconductor ETF surging 9.41% on AI demand while Chris Toomey, Morgan Stanley managing director of private wealth management, said investors are "just being more defensive."
- Strategist Michael Wilson advised to "stick with large cap quality and add to riskier stocks in October," citing stronger earnings and lower multiples, while warning that valuation concerns persist under the 5.26% Treasury yield.
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The New York square closed with profits, highlighting the technological ones, despite the volatility in the bond market.The Nasdaq reached record levels, reflecting optimism in the AI sector and technology before the results season.
Markets Turn Cautious Amid Rising Yields and Global Risks
U.S. September jobs data disappointed, initially pushing yields lower, gold and stocks higher, while the dollar rose. However, yields and gold reversed, stocks remained mixed, and NASDAQ barely reached record. Markets appear increasingly fragile, with rising real rates, shaky Treasury auctions, and AI companies accumulating debt. Meanwhile, geopolitical conflicts and energy pressures threaten economic deterioration.
The Dow Jones and the S&P 500 closed September with losses despite a last-minute rebound, while Treasury bonds peaked at a year's maximum.
The Billings Gazette
Equities rebound to close higher as surging Treasury yields recede
NEW YORK — U.S. stocks recovered from early losses to close slightly higher on Thursday, with the S&P 500 bouncing from a two-week low as a global bond sell-off reversed course after sending Treasury yields to multi-decade highs.
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