[New York Stock Exchange] U.S. Treasury Yields Fall, Oil Prices Rise... Gains Capped at Close

Treasury Yields Reverse as Bond Buying Increases
Global Oil Prices Rise Amid Renewed Middle East Tensions

As U.S. Treasury yields reversed to decline during the day, all three major indexes on the New York Stock Exchange closed slightly higher on October 1 (local time). However, gains were limited by the rise in international oil prices.

On the New York Stock Exchange, the Dow Jones Industrial Average (Dow) closed at 50,926.56, up 20.51 points (0.04%) from the previous session. The S&P 500 Index, representing large-cap stocks, rose by 14.91 points (0.19%) to 7,666.45, while the tech-heavy Nasdaq Composite gained 10.53 points (0.04%) to finish at 26,871.59.

New York Stock Exchange. New York, USA—Special Correspondent Yoonju Hwang

The market was led by declining Treasury yields on this day. The yield on the 10-year U.S. Treasury note surged to 5.344% during the session, marking its highest level since 2002. The 30-year yield also climbed to a 24-year high, but as buying picked up in the late morning, yields reversed lower.

According to CNBC, the yields on the 10-year and 30-year Treasuries settled about 5 basis points (1bp = 0.01%) and 3 basis points lower than the previous session, respectively. The yield on the two-year note, which is sensitive to monetary policy, fell by about 10 basis points.

Bloomberg reported that liquidating one-sided investment positions and a surge in demand for safe-haven assets due to fiscal concerns in France supported the rebound in Treasuries. Cautious remarks from Federal Reserve Vice Chair Philip Jefferson regarding further rate hikes also bolstered Treasury buying.

At a speech at the University of Virginia, Vice Chair Jefferson stated it may take more time to determine whether additional rate hikes are necessary. He emphasized that future policy adjustments should be decided only after carefully reviewing the trends in indicators, changes in the outlook, and the balance of risks.

His remarks echo those of John Williams, President of the New York Federal Reserve Bank, who stated after last month’s rate hike that there is no need to rush additional increases. Michelle Bowman, Fed Vice Chair for Supervision, also said more time is needed to better understand the underlying trends in the economy.

Goldman Sachs economists led by Jan Hatzius commented, “Vice Chair Jefferson’s remarks align with our view that the likelihood of an October rate hike has diminished.” They predicted that the next possible hike could come in December but also noted there is a significant chance the Federal Open Market Committee (FOMC) may ultimately decide further tightening is unnecessary.

In contrast, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, said in an interview with Bloomberg TV that it is uncertain how high rates must rise to bring inflation down. He stressed that, amid five years of supply shocks, it is the Fed’s role to bring inflation under control and reiterated a commitment to price stability.

Manufacturing Cost Pressures Widen... WTI Jumps 2.7% Amid Iran Tensions

Nevertheless, manufacturing data put some pressure on investor sentiment. The U.S. Institute for Supply Management (ISM) reported that the Manufacturing Purchasing Managers’ Index (PMI) for September came in at 54.5, down 0.1 point from the previous month and below market expectations. However, it remained above the expansion/contraction threshold of 50 for the ninth consecutive month.

Particularly, the price index, which reflects changes in input costs such as raw materials, surged by 6.8 points to 77.9 from 71.1 in the prior month. Rising energy prices and other input costs increased companies' cost burdens, stoking inflation concerns.

Employment data remained robust. According to the U.S. Department of Labor, new jobless claims last week totaled 197,000, down 1,000 from the previous week. This was below the market forecast of 200,000 and marked the lowest level since mid-July. U.S. companies’ announced layoffs for September were also the lowest for any September since 2022.

Heightened tensions in the Middle East also limited further gains in equities. U.S. President Donald Trump, in an interview with Time released this day, suggested the possibility of intensifying strikes against Iran after the midterm elections. Bloomberg, citing U.S. officials, reported that the United States could deploy an additional aircraft carrier and approximately 10,000 troops to the Middle East.

Against this backdrop, international oil prices rose. West Texas Intermediate (WTI) crude finished up 2.7% at $92.87 per barrel from the previous session.

By stock, Micron surged 3% on strong earnings. Last fiscal quarter, sales more than quadrupled thanks to soaring memory demand driven by investment in artificial intelligence (AI), and the company projected results exceeding market expectations again for this quarter.

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