Wall Street Falls as 10-Year Treasury Yield Hits 19-Year High of 5.24%

Wall Street opened the week in the red on Monday as a deepening selloff in US government bonds pushed the benchmark 10-year Treasury yield to its highest level since 2007.

The S&P 500 fell 59.7 points, or 0.77 per cent, to 7,683.69, while the Dow Jones Industrial Average dropped 347.1 points, or 0.67 per cent, to 51,481.51, according to The Wall Street Journal. The Nasdaq Composite slid 248.3 points, or 0.92 per cent, to 26,820.38.

The yield on the 10-year Treasury note climbed to 5.241 per cent, its highest closing rate since June 2007, while the 30-year yield hit 5.561 per cent — its strongest since 2002, the Journal reported. The two-year yield rose to 4.922 per cent, a level last seen in May 2024.

Investors sold bonds after the weekend delivered a fresh setback for Middle East peace talks, sending oil prices higher and deepening fears that inflation and interest rates will keep climbing, MarketWatch reported. Brent crude closed up 0.9 per cent at $105.28 a barrel, while gold futures fell 3.5 per cent to $4,135.40 an ounce — their biggest single-day decline since June.

Higher yields make stocks less attractive by lifting borrowing costs and the discount rates investors apply to company earnings. The AI stocks that powered last week’s rally were among Monday’s biggest losers, according to Barron’s.

Traders are now pricing in a roughly 70 per cent chance of another Federal Reserve rate hike at its late-October meeting, with key inflation and jobs data due later this week.

Sources

Wall Street Journal
MarketWatch
Barron’s
Investopedia