10-year U.S. Treasury yield surged to 5.135%, the steepest climb since April 7, 2025, and the Dow eased to 32,000. The S&P 500 slipped 0.75%, while the Nasdaq fell 1.1%, retreating from record highs.
The 10‑year spike pushes the yield above 5.1%, eclipsing the 5.4% level that last surfaced in June 2007. The 2‑year Treasury rose to 4.947%, the highest since May 2024, and the 30‑year yield is now approaching 5.4%, marking a 16‑year high.
Economic data painted a robust picture: the S&P Global Services PMI climbed to 58.7 in September, up from 56.5 in August, while the Manufacturing PMI hit 56.7, the strongest in four years. These readings underscore the fastest business‑activity growth since 2015, outside the COVID‑rebound.
Federal Reserve Governor Michael Barr warned of further rate hikes, stressing the need for price stability to sustain growth. After his remarks, the CME FedWatch probability of a 25‑basis‑point hike on October 28 jumped to 70% from 55.4%.
A treasury auction of the 5‑year note yielded 5.033%, far above the six‑auction average of 4.186%. Meanwhile, oil prices rebounded from lower levels amid concerns over an Iranian export ban, adding pressure on bond yields. Traders now focus on the US‑China summit, which could influence the market’s risk appetite in the coming weeks.