Wall Street dips as surging Treasury yields outweigh software gains
SPY•U.S. stocks slipped as the 10-year Treasury yield touched 5.3445%, its highest since 2002. The Dow fell 0.46%, the S&P 500 0.22% and the Nasdaq 0.07%, while software shares gained.
1. Yields pressure stocks
Wall Street’s main indexes fell as a bond selloff pushed Treasury yields to multi-decade highs, weighing on rate-sensitive shares. The 10-year Treasury yield touched 5.3445%, its highest since 2002; housing stocks fell 1.4% and banks dropped 2.2%.
2. Software and AI shares
Software shares rose after Accenture climbed 22% on a full-year revenue growth forecast above estimates. Cognizant gained 10%, IBM rose 4.2%, and the S&P 500 software index advanced 1.7%. Micron’s better-than-expected revenue forecast and $32 billion in customer commitments reinforced faith in the AI trade, although its shares slipped about 0.9%.
3. Rates and economic data
Traders priced in a 63% chance that the Federal Reserve would hold rates steady in October, while a December hike remained possible. Weekly jobless claims pointed to continued labor market resilience, and Minneapolis Fed President Neel Kashkari said labor market pain would not be needed to achieve the Fed’s inflation goal.
