US 10-year Treasury yield tops 5.2% as Wall Street steadies
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The yield on 10-year US Treasury notes rose above 5.2% on Thursday, its highest level in decades, pressuring equity valuations. US and China extended their trade truce to January 10, 2027, but investors remained focused on the bond sell-off. S&P 500 futures edged down 0.15% to 7,755 points early Friday.
Key Facts
- The 10-year Treasury yield reached about 5.22% on Thursday, while the 30-year yield hit 5.50%, the highest since June 2004.
- The US and China extended their trade truce to January 10, 2027, from the previous November 10 deadline.
- S&P 500 futures fell about 0.15% to 7,755 points early Friday, with Nasdaq 100 futures down about 0.2%.
- On September 24, the S&P 500 closed down just 0.02%, the Nasdaq added about 0.01%, and the Dow lost 0.31%.
- US Treasury Secretary Scott Bessent announced the truce extension, which Reuters reported was intended to allow time for broader economic talks.
Treasury Yield Surge
The 10-year Treasury yield climbed to roughly 5.22% on Thursday, and the 30-year yield reached 5.50%, the highest since about June 2004. High government bond yields compete directly with equities, making it harder to justify high valuations for technology companies whose prices rely on future earnings expectations. Against this backdrop, futures on US indices traded near flat early Friday, with S&P 500 futures down about 0.15% to 7,755 points and Nasdaq 100 futures down about 0.2%.
US-China Trade Truce Extension
Washington and Beijing agreed to maintain current arrangements until January 10, 2027, extending the previous November 10 deadline. US Treasury Secretary Scott Bessent announced the extension, and Reuters reported that the additional two months were meant to give both sides time to work on a broader economic agreement. Unresolved issues after the summit include tariffs, rare earth metal supplies, technology restrictions, and other sensitive trade areas, with AI remaining part of the negotiating agenda.
Market Reaction
On September 24, the S&P 500 closed down 0.02%, the Nasdaq added about 0.01%, and the Dow lost 0.31%, after deeper losses earlier in the day. Indices recovered some losses after Reuters reported diplomatic contacts regarding the US-Iran conflict. The combination of expensive oil, rising bond yields, and expectations of further Federal Reserve policy tightening continues to limit risk appetite.
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