Strong US PMI Data and Hawkish Fed Comments Trigger Bond Yield Surge, Stocks Fall
Stronger-than-expected US September PMI data (Composite 58.4, a 62-month high) and hawkish comments from Federal Reserve Governor Michael Barr drove a sharp selloff in Treasuries, pushing the 10-year yield to 5.135%, its highest since July 2007. The Nasdaq fell 1.13%, ending a four-day winning streak. Market expectations for a Fed rate hike at the October meeting rose to about 75% before easing to 68.6%. The dollar strengthened, gold fell below $4,300, and energy stocks rose on higher oil prices.
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