US Treasury Yield Hits High as Wall Street Indexes Fall, Hankyung Reports

American government borrowing costs surged to levels unseen in more than two decades on October 7, causing turmoil across Wall Street and pulling the S&P 500 and Nasdaq indices down from record highs achieved just one session prior, as Korea Economic Daily (Hankyung) reported.

Rising Treasury Yields Drive Major Stock Indices Lower

At the New York Stock Exchange, the Dow Jones Industrial Average fell 341.41 points, or 0.66 percent, to close at 51,179.87. The broader S&P 500 index retreated 17.16 points, or 0.22 percent, ending the day at 7,801.77. Meanwhile, the technology-heavy Nasdaq Composite dropped 61.20 points, or 0.22 percent, to settle at 27,538.69.

The primary catalyst for the sell-off was a sharp upward movement in United States Treasury yields. Driven by escalating international crude oil prices and expectations of expanded federal fiscal spending, the benchmark 10-year Treasury yield climbed past 5.36 percent during intraday trading, reaching its highest mark since 2002. Simultaneously, the 30-year bond yield approached 5.73 percent, marking a 24-year high.

Pressure on Big Tech and Semiconductors

The burden of high borrowing costs weighed heavily on growth-oriented equities, particularly technology and artificial intelligence names. Meta dropped more than 2 percent, Palo Alto Networks tumbled over 3 percent, and CrowdStrike fell roughly 5 percent. The Philadelphia Semiconductor Index lost 1.2 percent by the closing bell.

Relief arrived late in the session when Treasury yields trimmed their earlier gains. Strong demand at a $39 billion auction of 10-year notes pulled the benchmark yield back down to approximately 5.28 percent. The auction cleared at a high yield of 5.3 percent, representing the highest rate recorded at a 10-year auction since 2000.

Oil Prices Fall as Federal Reserve Signals Tightening

Crude oil prices provided a floor for equity losses after the International Energy Agency indicated it would accelerate the release of reserves. West Texas Intermediate crude fell 1.3 percent to settle at $88.28 per barrel, while Brent crude dropped 0.38 percent to $100.20 per barrel.

More on this story: S&P 500 and Nasdaq Hit Record Highs as Stocks Climb