The bond selloff runs into a second day and the long bond reaches its 2007 high

Methodology note: Morning report, generated before the September 24 US open. Sources cited inline.

The Bond Selloff Runs Into a Second Session and the Thirty-Year Reaches Its 2007 High

The long end kept selling overnight after yesterday's PMI-led repricing, and it did so on a night that brought the most constructive trade news in months. The thirty-year rose another 3 basis points to 5.438%, within a basis point of its 2007 high of 5.44% and at its highest since 2004. The ten-year reached 5.139%, the two-year 4.897%, and Nasdaq 100 futures are down 1% against 0.6% for the S&P 500. A second Fed official leaned toward another increase and Brent rose above $104. The US-China truce was extended to January 10 minutes after Xi landed, and chip-heavy futures still fell hardest. That ordering is the read: this morning the discount rate matters more to equities than trade policy does.

• Nasdaq 100 futures fell 1%, S&P 500 futures 0.6% and Dow futures 0.3%, with the thirty-year at 5.438% and the two-year at 4.897%, its highest since 2023 — the heaviest selling is in the longest-duration index, which is what a rates move, not a growth scare, produces
• The ten-year touched 5.139%, its highest since July 2007 — a second day higher after the largest one-day rise since April 2025, so the move is extending rather than fading
• New York Fed President John Williams called another increase this year "reasonable" but did not commit to October — after Barr's comments, a second voter is now describing a further hike as the default, with CME FedWatch near 73% for October 28
• Brent rose 1.1% to $104.19 by 4:01 a.m. ET as the chance of a quick US-Iran breakthrough faded — a second day higher takes back most of the September decline the long end had been counting on for relief
• Treasury Secretary Bessent said the US-China truce, due to lapse in November, is extended two months to January 10 — a deadline removed from the quarter, and the chip-heavy index is still the weakest future
• Japan's ten-year rose 10 basis points to 3.08% as Tokyo reopened after five closed sessions — the selling is global, which makes a US-only explanation such as the five-year auction insufficient on its own

September 24, 2026 Premarket

What changed since last report

• The level last night's report named has been reached. It put the thirty-year four basis points from its 2007 peak with Treasury's buyback bid still in the market. That gap is now under one basis point, on intraday trade rather than a close.
• Fed commentary broadened. Yesterday it was Barr alone. Williams now says a further increase this year is "reasonable", while also saying explicit forward guidance is "over". Two officials have said so, and the market is pricing roughly three-in-four odds for October, so a hawkish data print carries more weight than it did a week ago.
• The oil offset kept reversing. Brent is up for a second day, at $104.19, and the White House has signalled both ways on a 90-day diesel export ban with diesel at a record $6.52 a gallon. That adds a fuel-price channel to the inflation case the bond market is already pricing.
• Trade risk fell and did not help. The truce extension removes the November 10 deadline the semiconductor group was carrying. Nasdaq futures falling 1% anyway says rates, not China policy, are setting prices this morning.

Movers

• Darden Restaurants reported blended same-restaurant sales up 3.1%, with LongHorn at 6.2% and Olive Garden at 1.1%, a single-brand result that keeps the consumer-discretionary read split between beef-led growth and a flat core.
• Micron comes into the open after a 5.00% gain to $1,096.16 on a down day. That leaves the highest-momentum AI name the most exposed to a duration-led Nasdaq decline six sessions before its September 30 print.

What to watch

A thirty-year close above 5.44%. Intraday, the long bond is already there; a close above it would be the first two-decade high set while Treasury's expanded buyback program is still buying that maturity, which runs through November 4. A close back under 5.35% would put yesterday's 11 basis points down to one survey and a weak auction rather than a change in term premium. Today's seven-year auction is the next supply test after Wednesday's poorly received five-year sale.

Whether the Nasdaq decline is duration or a crowded-trade unwind. The Philadelphia Semiconductor Index rose more than 8% during Tokyo's five-day break, and Japanese chip shares led the Nikkei's reopening today. If chips fall more than the Nasdaq 100 on a day the truce removed their main policy deadline, the selling is about positioning in a crowded trade. If they fall in line with other long-duration growth stocks, the selling is about rates. The answer bears on how Micron's September 30 print is received.

Costco after the close, and Friday's PCE behind it. Consensus sits near $94.87 billion of revenue and $6.52 EPS, with comparable sales and membership fees the lines that matter. A firm consumer print adds to the demand case the PMI made. Friday's core PCE is the first hard inflation data since the repricing, and it decides whether roughly 73% October odds are resting on data or on one survey.