Stocks Slide Lower as U.S. Treasury Yields Hit Record Highs
The S&P 500 Index ($SPX$) (SPY) closed down by -0.77% on Monday, the Dow Jones Industrial Average ($DOWI$) (DIA) closed down by -0.67%, and the Nasdaq 100 Index ($IUXX$) (QQQ) closed down -1.08%. December E-mini S&P futures (ESZ26) fell -0.76%, and December E-mini Nasdaq futures (NQZ26) fell -1.07%.
Stock indexes settled lower on Monday amid a surge in bond yields. Stocks fell as bond yields rose amid concerns that the Strait of Hormuz will remain closed for the foreseeable future, keeping oil prices elevated and raising inflation expectations, which could prompt the Fed to keep tightening monetary policy. The 10‑year T‑note yield soared to a 19‑year high of 5.27% on Monday.
Stocks revived briefly when crude prices retracted gains after CNN reported that President Trump is willing to ease Iran sanctions in exchange for nuclear progress.
Fed Governor Lisa Cook offered hawkish commentary, signaling a possible tilt toward additional rate hikes and suggesting that the recent lift was aimed at countering entrenched inflation while the labor market appears capable of absorbing higher costs.
The US and China unveiled a joint plan to slash roughly $30 billion worth of bilateral tariffs. Complementary support came from weaker-than-expected manufacturing numbers at the September Dallas Fed survey (falling -1.8% versus the expected 7.8%).
WTI crude oil (CLX26) edged up slightly on Friday as optimism dimmed about imminent ceasefire developments related to the Iran war. News that the US and China struck a tariff reduction pact prompted upside moves later in the market.
Market participants priced in a 70 % probability of a 25‑bp Fed funding rate increase at the upcoming October 27‑28 meeting.
International equity responses varied widely. The Euro Stoxx 50 slipped -0.02%; Shanghai Composite plunged -1.67% to a one‑month low; and Japan’s Nikkei‑225 fell -0.73% near its three‑week high.
Interest Rates
Declining 12‑month Treasury yields follow the recent spike. The 10‑year T‑note dropped -12 ticks, closing at 5.230% as the yield jumped +6.9 bp. T‑note prices tumbled to a 19‑year new low, while the 10‑year yield broke a decade‑high at 5.272%. Pressures intensified after Iran’s rejection of the peace proposal; the prospect of sustained Strait of Hormuz closures threatened higher oil costs and added caution to the Fed’s current stance. Governing body Chair Lisa Cook echoed this tone, hinting her support for further tightening.
European sovereign debt rose accordingly. The 10‑year German bund reached a 17‑year high of 3.654% (+4.2 bp); the UK gilt rose to a 19‑year high of 5.437% (+5.6 bp).
The European Central Bank observed a dovish bent, noting that “long‑term interest rates have risen notably, which will slow growth and reduce pass‑through by more than projected” since their last meeting.
Markets now assess a 36 % likelihood of another 25‑bp ECB rate uptick at the October 29 gathering.
US Stock Movers
Chip makers and AI-focused names led the bear market as yields climbed. The iShares Semiconductor ETF (SOXX) fell over -1%; ARM Holdings (ARM) dropped more than -8% and topped the Nasdaq‑100 laggers; Qualcomm (QCOM) closed below -7%. Intel (INTC) slipped over -5%; SanDisk (SNDK), AMD (AMD), and Marvell Technology (MRVL) all declined beyond -3%. Microchip Technology (MU) retraced over -2%.
Materials exposure suffered as gold and silver slid to fifteen‑day lows. AngloGold Awards (AU), Coeur Mining (CDE), and Hecla Mining (HL) each shrank over -6%, while Newmont (NEM) and Barrick (B) trended down over -4%.
Software champions stumbled under pricing turmoil. Atlassian (TEAM) fell over -4%; ServiceNow (NOW) and Oracle (ORCL) dipped over -3%. Salesforce (CRM) and Intuitive (INTU) declined deeper than -2%.
Cyber defense stocks outperformed, adding strength to the broader session. Palo Alto Networks (PANW) surged above +4%, leading the gainers across both the S&P 500 and Nasdaq 100. Okta (OKTA), Zscaler (ZS), and Crowdstrike (CRWD) also rose strongly; Cloudflare (NET), Fortinet (FTNT), and SentinelOne (S) followed suit.
Outside tech catalysts contributed mixed waves. Roblox (-9%) sank after Jefferies downgraded it to underperform with a price cap. Bloom Energy (-8%) lagged behind a data‑center payment dispute filed against Oracle in New Mexico. Boeing (-6%) recorded another selloff pending FAA delay on the 737 Max 10 certification. UiPath (-2%) drifted downward after a downgrade; Snowflake (-2%) weakened following its plan to issue $3.5 billion in convertible notes.
Earnings Reports (9/29/2026)
AAR Corp (AIR), CarMax Inc (KMX), Carnival Corp Ltd (CCL), Concentrix Corp (CNXC), Critical Metals Corp (CRML), and Uranium Energy Corp (UEC) report today.
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
For more information please view the Barchart Disclosure Policy
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