- The benchmark 10-year Treasury yield reached 5.054%, its highest level since 2007, after the S&P Global flash US Composite PMI Output Index soared to a more than five-year high of 58.4 in September on new orders.
- The robust activity data intensified expectations of further Federal Reserve rate hikes to fight persistent inflation, with traders pricing 73% odds of an October hike.
- Equities fell on the yield surge, with the Nasdaq Composite down 1.05%, the S&P 500 down 0.53%, and the Dow Jones Industrial Average down 0.18%.
- The session read as rotation rather than broad panic: Meta Platforms climbed 2.88% on product momentum ahead of its keynote and Paychex dropped 6.57% on an in-line earnings outlook, with capital shifting toward less rate-sensitive areas like energy and healthcare.
- Asian shares aimed for a sixth straight session of gains on AI-app demand, while oil faltered on reports that Saudi Arabia restarted its East-West Pipeline and resumed exports from the Red Sea port of Yanbu.
Quotes
“the benchmark 10-year Treasury yield reached 5.054 per cent, its highest level since 2007”
“traders now pricing in 73 per cent odds of an October rate hike”
“The market is currently adjusting to a "higher-for-longer" interest rate environment, with capital shifting into less rate-sensitive areas like energy and healthcare”
“Meta Platforms climbed 2.88% on product momentum ahead of its keynote”