[New York Stocks] 30-Year Yield Surges to 5.2% After FOMC Decision... Broad Market Ends Lower

30-Year Treasury Yield Soars to 5.21%, Highest Since 2007
WTI Jumps 6.6% After Trump Warns Iran of Retaliation
Semiconductor Stocks Tumble Together; Micron Drops 9.94%

On the 29th (local time), all three major U.S. stock indexes on the New York Stock Exchange plunged sharply. Investor sentiment was significantly dampened as the yield on long-term U.S. Treasury bonds surged following the Federal Reserve (Fed)'s fifth consecutive decision to keep its benchmark interest rate unchanged, while international oil prices soared on concerns over a potential conflict between the U.S. and Iran.

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 51,594.14, plunging 1,153.18 points (2.19%) from the previous trading day. The S&P 500 index, which is focused on large-cap stocks, lost 112.64 points (1.52%) to close at 7,316.15, while the tech-heavy Nasdaq index finished at 24,442.94, down 433.97 points (1.74%).

The primary reason cited for the market’s steep drop was the Fed’s rate freeze decision. CNBC reported that, despite persistent inflation concerns, the Fed’s fifth consecutive rate hold fueled worries in the bond market that the central bank could be falling behind in its efforts to control inflation.

Following the regular meeting of the Federal Open Market Committee (FOMC), the Fed kept its benchmark interest rate steady at 3.50–3.75%. With this move, the Fed has now held rates unchanged for five consecutive times—in January, March, April, June, and now July of this year. The Fed stated that the decision was made through a vote among the twelve FOMC members, with nine in favor and three against.

By 3:34 p.m., near the conclusion of Fed Chair Kevin Warsh’s press conference, the yield on 30-year U.S. Treasuries had increased 0.1 percentage point from the previous session to reach 5.21%. This is the highest level since July 2007, before the financial crisis—marking a 19-year high. The yield on 10-year U.S. Treasuries also rose, up 0.07 percentage point to 4.67%.

At the press conference, Chairman Warsh emphasized, “There is only one goal, and that is [to bring inflation down to] 2%,” adding, “If it is necessary and appropriate, we will not hesitate to take action.” Despite Warsh’s explicit commitment to price stability, this failed to alleviate jitters in the bond market.

Jeffrey Gundlach of DoubleLine told CNBC, “If you really want to bring [inflation] down to 2%, I think you have to raise rates,” pointing out that the surge in bond yields constitutes a message to Warsh from the bond market.

Gundlach added, “Long-term bond yields rose sharply after the press conference because market watchers in the bond market are saying, ‘If you want us to truly believe what you say, you need to act.’”

International oil prices soared as well. U.S. President Donald Trump told Fox News reporters that the U.S. would respond “forcefully” to Iran in retaliation for its surprise attack.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude for September delivery surged 6.6% to USD 84.46 per barrel. On the ICE Futures Exchange, Brent crude for September delivery jumped 7.9% to USD 90.74 per barrel.

The semiconductor sector also remained weak. CNBC noted that semiconductor stocks came under pressure due to concerns over the profitability of massive AI investments and mounting anxiety about intensified competition with China. Notably, Micron dropped 9.94%, KLA declined 10.80%, and AMD fell 5.51%.

Meanwhile, just after the Fed’s rate decision announcement—at 2:16 p.m. Eastern Time—the spot price of gold was trading at USD 4,076.41 per ounce, up 1.2% from the previous session. Ahead of the Fed’s decision, expectations for prolonged high rates and surging oil prices briefly drove intraday gold prices below the USD 4,000 per ounce level.

This content was produced with the assistance of AI translation services.