Stocks fall as 10-year Treasury yield tops 5.12% on strong data

  • Stocks fell Wednesday as surging Treasury yields pressured major U.S. equity indexes.
  • 5.12% marked a new 19-year high for the 10-year Treasury yield.
  • CME FedWatch put the probability of two 25-basis-point hikes at 57%, up from 38%.

U.S. stocks fell Wednesday after strong economic data pushed the 10-year Treasury yield above 5.12%, its highest level in 19 years. The bond selloff accelerated after the S & P Global US Flash PMI showed manufacturing conditions improving to 57 in September from 53.9 in August, the strongest improvement since May 2022, while input-cost pressures increased across goods and services. Markets interpreted the data as increasing the Federal Reserve's scope to raise interest rates to slow growth and contain inflation. CME FedWatch showed a 57% probability of 25-basis-point increases at each of the final two 2026 meetings, up from 38% a week earlier. The S & P 500 dropped nearly 1% and the Nasdaq fell more than 1%, while energy and industrials advanced. Boeing rose more than 1.5% after its engineers' union recommended accepting the company's latest contract offer ahead of the Oct. 9 deadline, while optimism also surrounded a planned meeting between President Donald Trump and Chinese President Xi Jinping. Meta Platforms shares have gained more than 20% since the launch of its Muse personal AI agent, with CEO Mark Zuckerberg's developers-conference keynote the main event after the close. Thursday's schedule includes earnings from Darden Restaurants and Costco, along with new-home sales and building-permit data. CNBC Investing Club subscribers receive trade alerts before Jim Cramer trades, subject to waiting periods and the club's terms, disclaimer and privacy policy.

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