Key facts
- The 10-year US Treasury yield reached 5.34% on Thursday, its highest since April 2002.
- The 10-year yield was last down 2.07 basis points at 5.272%.
- The 2-year Treasury yield fell 7.28 basis points to 4.814%.
- The euro was down 0.79% at $1.1238.
- US manufacturing activity was little changed in September, with input prices surging.
- Oil prices extended recent gains, with US crude up 1.52% and Brent up 2.81%.
Bond yields fell on Thursday after the benchmark 10-year US Treasury yield hit its highest level since April 2002, as investors assessed US manufacturing data that indicated sustained inflation pressures. Stocks and the euro also declined.
US manufacturing activity was little changed in September, with prices for inputs surging amid strong demand, according to data released Thursday. Investors are now looking ahead to Friday's key US monthly jobs report for further economic insights.
Yields have been rising globally due to soaring energy costs fueling inflation and increased expectations for growth and interest rates driven by the boom in AI and data center construction. Oliver Pursche, senior vice president and advisor for Wealthspire Advisors, suggested that the recent bond selloff might be overdone, pushing Treasury yields to attractive levels.
The yield on benchmark US 10-year notes was last down 2.07 basis points at 5.272%, after earlier reaching 5.34%, its highest point since April 2002. The 10-year yield recorded its largest quarterly increase this century in the three months ending September, with selling pressure also impacting bonds in France, Britain, and Japan. The 2-year note yield, closely tied to Federal Reserve rate expectations, fell 7.28 basis points to 4.814%, hitting a one-week low.
Meanwhile, the euro dropped to a 17-month low against the dollar, falling below $1.13 for the first time since May 2025. Steven Major, global macro advisor at Tradition, noted that Europe's reliance on energy imports makes it vulnerable to higher rates and potential financial crises, suggesting a weaker euro is a likely outcome.
Global stock markets eased, with MSCI's gauge of stocks across the globe falling 0.39% to 1,130.30. The pan-European STOXX 600 index declined 1.3%. In the US, the Dow Jones Industrial Average fell 0.22%, the S&P 500 dropped 0.12%, and the Nasdaq Composite decreased by 0.16%.
Micron Technology shares fell approximately 2%, despite the company issuing a better-than-expected revenue forecast and reporting $32 billion in customer commitments for its supply agreements.
Oil prices continued their recent upward trend, with US crude rising 1.52% to $91.79 a barrel and Brent crude increasing by 2.81% to $100.78 per barrel. Elevated crude prices are attributed to stalled peace talks between the US and Iran aimed at ending the seven-month war in the Middle East. Spot gold rose 0.35% to $4,170.68 an ounce.