US Stocks And Treasuries Fall As Brent Crude Settles Near $103
A weak $70 billion five-year Treasury auction and the strongest US business activity reading since 2021 pushed bond yields toward two-decade highs.
Published
US stocks and Treasury prices fell as Brent crude settled near $103 a barrel, adding to concern that inflation is not cooling as quickly as policymakers have suggested. A survey of US business activity came in at its strongest since 2021, giving investors another reason to expect the Federal Reserve to stay cautious on rate cuts.
Treasury yields moved higher across the curve. The five-year yield rose to 5%, its first time at that level since 2007. The 10-year yield reached 5.081%, the highest since July 17. The 30-year yield hit 5.367%, on pace for its highest settlement since June 2004. The two-year yield touched 4.79%, its high for the year, extending a climb in short-term rates that was already underway before today.
A $70 billion auction of five-year notes drew weak demand, a sign that investors are asking for more compensation to hold the debt. The sale came as Treasury Secretary Bessent met China's Vice Premier He Lifeng, a day before President Trump is due to host Xi Jinping in Washington to discuss trade, rare earths and artificial intelligence. A temporary US-China trade truce expires November 10, and that deadline is expected to come up in the talks.
Oil near $103 a barrel reinforces the inflation pressure that has already driven yields to multi-decade highs, at odds with Bessent's suggestion that price pressures remain under control. The weak auction result points to a market demanding higher compensation to hold longer-dated debt, a shift in rate expectations that is happening independent of anything the Fed or Treasury has signaled.