Stocks dip, 2-year US yield falls after Fed's Williams cools rate hike bets
TLT•U.S. stocks edged lower and the 2-year Treasury yield fell after New York Fed President John Williams said there was “no urgency” for further action, cutting market-implied odds of an October rate hike to about 50% from nearly 70%. The 10-year yield reached 5.2932%, its highest since June 2007.
1. Rate hike bets ease
The 2-year Treasury yield fell 3.51 basis points to 4.889% after earlier reaching 4.9596%, its highest since May 2024. Williams said he saw “no urgency” for further action after the Fed raised rates earlier this month. Traders priced in about a 50-50 chance of a quarter-point hike in October, down from nearly 70% earlier in the day.
2. Longer yields rise
The 10-year Treasury yield rose 1.32 basis points to 5.255%, after reaching 5.2932%, its highest since mid-June 2007. The 30-year yield gained 3 basis points to 5.592%, after hitting its highest since June 2002. Investors were watching the upcoming U.S. personal consumption expenditures inflation report and monthly jobs report.
3. Stocks and oil slip
The Dow fell 0.26%, the S&P 500 fell 0.17% and the Nasdaq Composite fell 0.08%. Optimism about Anthropic’s planned IPO helped limit the equity declines; its prospectus showed sharply higher growth and wider losses, and the company is targeting a valuation above $2 trillion. U.S. crude settled down $3.22 at $89.38 a barrel, while Brent fell $2.69 to $102.59.
