Treasury yield surge weighs on tech stocks, Nasdaq falls over 1% from record

U.S. stock indexes closed lower on Wednesday, as robust PMI data and hawkish remarks from a Federal Reserve official pushed Treasury yields sharply higher, dragging down technology stocks and pulling the Nasdaq back from two consecutive record closes.

Market Close

• S&P 500: Down 0.75%, closing at 7,706.39
• Nasdaq Composite: Down 1.13%, closing at 26,936.04
• Dow Jones Industrial Average: Down 0.68%, closing at 51,512.42

Economic Data and Fed Outlook

Data released Wednesday showed a significant acceleration in U.S. private sector expansion:

• S&P Global Composite PMI (September): Rose to 58.4, a 62-month high
• Manufacturing PMI (September): Rose to 57.0, a 52-month high

Inflationary pressures also emerged, with input costs for businesses rising at the fastest pace since October 2022, driven by higher fuel and freight costs as well as wage growth.

Following the PMI release, market expectations for at least a 25-basis-point rate hike at the Fed's October meeting rose to approximately 75%, up from about 53% before the data. As of press time, the CME FedWatch Tool showed the probability of an October hike had eased slightly to 68.6%.

Fed Official Comments

Federal Reserve Board Governor Michelle Bowman delivered a hawkish message, stating that inflation risks have increased while employment risks have diminished. She indicated that under her baseline scenario, further policy adjustments may be necessary to bring inflation back to target in a timely manner.

Treasury Yields Surge

In response to the data and Fed comments, U.S. Treasury yields rose sharply:

• 5-Year Treasury Yield: Rose 17 basis points to 4.997%, briefly surpassing 5% for the first time since 2007
• 10-Year Treasury Yield: Rose approximately 15 basis points to 5.104%, reaching an intraday high of 5.135% — the highest level since July 2007

Key Stock Movers

Major Tech and Mega-Cap Stocks

| Stock | Change | |-------|--------| | NVIDIA | -1.47% | | Apple | -0.80% | | Alphabet (Google) | -3.80% | | Microsoft | +0.52% | | Amazon | -2.24% | | TSMC | -1.20% | | SpaceX | -4.11% | | Meta | +1.02% | | Broadcom | -2.62% | | Tesla | +0.32% | | SK Hynix | -3.12% |

Optical Communications and Memory Chip Stocks

Most stocks in the optical communications and memory chip sectors declined:

• SanDisk, Corning, Coherent, Ciena, SK Hynix: Down over 3%
• Micron Technology: Down over 2%

AI Agent Impact on Travel Stocks

Meta's AI agent "Muse" continued to generate market concern, with fears that it could bypass travel aggregation platforms. Expedia and Airbnb both fell nearly 8%. Goldman Sachs warned that AI agents could broadly disrupt industries that rely on intermediary fees as their primary revenue model.

Quantum Computing

IonQ rose 4.42% after showcasing the industry's first end-to-end real-time quantum error correction decoder and disclosing a deployment related to NVIDIA systems.

Energy Sector

Oil prices rebounded, driving the energy sector higher — the best-performing sector in the S&P 500. Iranian President Masoud Pezeshkian criticized "double standards" by some countries on Iran's nuclear program and the Israel-Palestine issue during his UN General Assembly speech, cooling market optimism for U.S.-Iran reconciliation talks. International oil prices ended a five-day losing streak.

Gold Mining Stocks

As expectations for a Fed rate hike rose and the U.S. dollar strengthened, gold mining stocks fell broadly:

• Pan American Silver, Harmony Gold: Down over 5%
• Eldorado Gold, Gold Fields: Down over 4%
• Kinross Gold: Down over 3%
• Newmont Mining: Down over 2%

Chinese Stocks (Nasdaq Golden Dragon China Index)

The index fell 1.43% on Wednesday.

| Stock | Change | |-------|--------| | Alibaba | -4.74% | | Pinduoduo | -1.43% | | NetEase | -1.47% | | JD.com | -0.80% | | Baidu | -32.87% | | Ctrip | -0.54% | | Li Auto | +0.34% | | Futu Holdings | -3.79% | | Bilibili | -1.83% | | NIO | -1.34% |

Corporate News

TSMC to Raise Wafer Prices by 3% to 6% Starting January 2027

According to sources cited by media reports, TSMC has confirmed another round of wafer price increases. Supply chain sources indicate that with 8-inch fab utilization exceeding 100% and 45nm and below process nodes running at full capacity, TSMC's order visibility extends to 2030. The company has decided to adjust Wafer Out prices by approximately 3% to 6% depending on the process node, effective January 2027. TSMC did not respond to market rumors.

McDonald's to Invest $8.5 Billion to Support Franchisees

McDonald's announced at its 2026 Investor Day that it will provide approximately $8.5 billion in support to franchisees as part of a multi-year plan running through 2036. About $5 billion of that will be deployed by 2030. The plan includes upgrades to food and beverages, service improvements, new restaurant designs, and simplified store operations. The company called it the largest menu upgrade in its history.

Anthropic CEO: Company Will Slow AI Development Due to Safety Concerns

Anthropic CEO Dario Amodei addressed the UN Security Council on artificial intelligence, stating that rapid AI development has advanced health sciences but also poses risks to all of humanity. He warned of the risk that malicious actors could use AI to create biological weapons and said that if mismanaged, AI could pose an existential risk to humanity. For safety reasons, the company will slow its AI development pace.

Alphabet: Google Cloud Expands Regions, Partners, and Customers

Alphabet announced that Google Cloud is expanding into new regions, partnerships, and customer bases. Google Beam devices will ship to six countries, including the U.S., Canada, the U.K., France, Germany, and Japan. Starting in October, the devices will be available at Industrious office locations in Atlanta, Chicago, New York City, and Palo Alto.

Novo Nordisk: CagriSema Shows Superior Weight Loss vs. Tirzepatide in REIMAGINE 5 Trial

Novo Nordisk reported results from its Phase 3 REIMAGINE 5 and REDEFINE 9 trials for the once-weekly CagriSema (cagrilintide and semaglutide) combination. In the REIMAGINE 5 trial, CagriSema 1.0 mg/1.0 mg demonstrated superior weight loss compared to tirzepatide 5 mg, achieving an estimated mean weight reduction of 12.4% versus 9.1% for tirzepatide. CagriSema also showed non-inferiority in HbA1c reduction, with a decrease of 1.71% compared to 1.67% for tirzepatide. In the REDEFINE 9 trial, CagriSema 1.0 mg/1.0 mg achieved a 21.0% weight reduction versus 2.0% for placebo, meeting the primary superiority endpoint. Additionally, CagriSema showed greater improvements in supportive endpoints including systolic blood pressure, waist-to-height ratio, and fasting lipid levels compared to placebo.

AI Communications Infrastructure Company Bird.com Raises $450 Million

On September 23, AI communications infrastructure company Bird.com announced it had completed a $450 million debt financing round led by JPMorgan. The company also launched its revamped Agentic Harness platform, which now allows AI agents to send messages, make calls, manage emails, and even obtain their own eSIM phone plans on the Bird network without requiring custom integrations.

Microsoft Plans $400 Million Investment in Subsea and Terrestrial Connectivity

Microsoft announced plans to invest $400 million in subsea and terrestrial connectivity in the Middle East by 2030. The investment includes expanding cloud computing and AI infrastructure in the region.