U.S. yields lower as AI risk is gauged
TLT•U.S. Treasury yields fell as investors weighed risks to AI stocks and data showed weakening housing demand. The 10-year yield dropped 4 basis points to 5.096%, while the pending home sales index fell 7.3% to 66.0, its lowest since the series began in 2001.
1. Treasury yields decline
U.S. Treasury yields fell Tuesday, though they moved off earlier lows as stocks recovered and investors assessed risks to AI stocks. The 10-year yield declined 4 basis points to 5.096%, and the 30-year yield fell 5 basis points to 5.423%.
2. Rate expectations ease
Markets priced a 14.9% chance of a Federal Reserve rate hike of at least 25 basis points next week, down from 22.1% a week earlier and 57.6% a month earlier. The two-year yield shed 0.8 basis point to 4.753%.
3. Housing demand weakens
September single-family homebuilding and permits for future construction fell sharply, while pending home sales dropped 7.3% to 66.0, the lowest reading since the series began in 2001. The yield curve gap between two- and 10-year Treasuries was positive 34.3 basis points.
