10-Year Treasury Yield Hits Highest Level Since 2002, Pulling Stocks From Record Highs

NEW YORK, Oct. 7 (TodayViralUSA) — The yield on the benchmark 10-year U.S. Treasury note rose to its highest level in more than two decades on Wednesday, as climbing oil prices rekindled inflation fears and pulled Wall Street back from the record highs it set a day earlier.

The 10-year yield climbed more than 8 basis points to about 5.36%, its highest since April 2002, while the 30-year bond yield rose to roughly 5.73%, a level last seen in May 2002, Quartz reported. Bond yields move inversely to prices.

In Wednesday trading, the Dow Jones Industrial Average fell about 450 points, or 0.9%, while the S&P 500 slipped 0.6% and the Nasdaq Composite lost 0.9%. On Tuesday, a rally in chipmakers had carried the S&P 500 above 7,800 for the first time, with both it and the Nasdaq closing at records.

Oil and inflation in focus

Brent crude, the international benchmark, traded back above $100 a barrel, reaching about $102, as traders weighed a pickup in Iranian attacks on shipping in the Strait of Hormuz, Bloomberg reported. U.S. crude rose above $90.

Investors are demanding greater compensation to hold government debt amid concerns about persistent inflation, heavy federal spending and a surge in corporate borrowing to finance artificial-intelligence infrastructure, according to Bloomberg. Money markets were pricing roughly a one-in-four chance that the Federal Reserve raises rates again this month.

Fed minutes and a bond auction ahead

The selloff came ahead of a $39 billion auction of 10-year notes and the release of minutes from the Fed’s September meeting, when the central bank raised interest rates for the first time since 2023. Traders will be studying the minutes for clues about whether more increases are coming. Most still expect the Fed to hold steady in October, though a December hike remains possible, according to the CME FedWatch tool cited by Reuters.

Attention will soon shift to corporate results. Third-quarter earnings season begins next week with reports from major financial firms, and analysts expect aggregate S&P 500 earnings growth of about 30.6% for the period, led by energy and technology, according to LSEG data.