Treasury Yields Drop 19 bps; October Hike Is Off the Table
The 10-year Treasury yield fell 19 basis points on Thursday to 4.95%. It was the steepest one-day drop since March 2023; the yield stood at 5.13% a day earlier and hit 5.36% on October 7. This morning it trades between 4.95% and 4.97%, close to Thursday's close.
The drop came from a flight out of tech, not from the Fed. The Nasdaq 100 fell 2.9%, the semiconductor index lost 6.7%, and money moved into bonds. Weekly jobless claims fell to 194,000, a print that usually lifts yields, but the sell-off overwhelmed it.
CME FedWatch puts the odds of a hike of at least 25 basis points on October 28 at 7.2%. That is down from 27.7% a week ago and 55.4% a month ago. The market is now debating December, not October.
Oil is moving the other way. Brent rose 1.1% to 1.6% this morning to between $114 and $115, a five-month high, while WTI sits at $101. The Wall Street Journal reported that the U.S. and Israel are weighing new strikes on Iran after the midterms; Tehran said it is prepared for war.
Meta was the source of the tech sell-off. The stock fell about 7% on Thursday as investors reacted to its plan to issue non-voting shares to fund AI spending. Nvidia lost 4.4% and AMD more than 8%; both are slightly higher this morning.
