US 10-year yield drops under 5% as tech stocks slide

what happened

According to TradingView, citing RTTNews and dpa-AFX, US Treasuries rallied strongly on Thursday. The benchmark 10-year yield, which moves inversely to price, dropped 19.3 basis points to 4.953%, falling below 5% for the first time in a month.

The bond gains came alongside a sell-off on Wall Street, where worries about debt-financed spending on AI infrastructure weighed on technology stocks. The Nasdaq fell to its lowest level in more than a month, and investors sought the safety of government debt.

Oil moved higher: US crude futures rose more than 2%, extending an earlier spike after President Donald Trump denied that Washington is negotiating with Iran and said that 'something one way or the other' would happen fairly soon. The New York Times reported that the US and Israel have prepared detailed plans for new strikes on Iran after the vote. Bond traders, however, largely looked past the jump in oil prices.

Despite inflation risks from pricier crude, the Federal Reserve is still expected to keep interest rates unchanged at its October 27-28 meeting. CME Group's FedWatch tool put the probability of that outcome at 92.8%, while it saw a 72.4% chance of a quarter-point rate hike in December.

why it matters

For markets, this points to a shift in rate expectations: a pause in October is largely priced in, while a December hike is viewed as more likely than not. Yields will remain sensitive to oil and inflation data, and the drop in yields supports long-dated bonds without shielding technology stocks from selling.

market impact

US Treasuries, Nasdaq: safe-haven demand pushes yields lower, while WTI reacts to Iran strike reports.

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