Long-term Treasury yields climb past their 2002 highs overnight as chip stocks hold up futures

Methodology note: Morning report, generated before the October 1 US open. Sources cited inline.

The 30-Year Yield Moved Above Its 2002 High Overnight, While Chip Stocks Lifted Nasdaq Futures

The thirty-year Treasury yield traded above 5.644%, its 2002 high, for the first time overnight. That is the level Wednesday night's report said would confirm the rise in long-term rates. It reached about 5.66%, and the ten-year about 5.32%, both the highest since 2002, the day after Treasuries had their worst quarter since 1994. The move is global: European stocks fell 1% and Dow futures hit a three-month low. Stocks are split, though. Micron's results lifted other chipmakers and Alphabet released a new flagship AI model, so Nasdaq-100 futures are up 0.6%. By the latest quotes the thirty-year has slipped back to about 5.64%, right at the line, so today's close decides whether the break holds.

• Ten-year and thirty-year yields hit 5.32% and 5.66%, the highest since 2002, a day after Treasuries' worst quarter since 1994. The Treasury's larger buybacks of long bonds have not stopped the selling.
• The ten-year rose 87.1 basis points over the September quarter, its sharpest quarterly rise since 1994. Yields that climbed that far in three months have not yet shown signs of levelling off.
• October hike odds fell to about 37% from more than 70% a week ago, yet long yields kept rising. Expected Fed moves are not what is lifting the long end.
• The STOXX 600 fell 1% to 628.1 by 0720 GMT, its lowest since mid-September, with banks leading. The selling extends past the US.
• S&P 500 futures rose 0.3% and Nasdaq-100 futures 0.6%, with Nvidia, AMD and Broadcom higher. Chip stocks are holding up despite rising rates, but the rest of the market is not.

October 1, 2026 Pre-Market

What changed since last report

Wednesday night's report named a thirty-year close above 5.644% as the confirmation level. The yield moved above it overnight but has not yet closed there.

• The pressure is coming from supply and inflation, not the Fed. Reuters lists three causes: oil-driven inflation, heavy bond sales to fund AI spending, and US debt above $40 trillion. October hike odds fell by about half in a week and long yields rose anyway, which fits that list.
• Oil turned higher before the open. Brent rose back above $100 after a report that Chinese refiners suspended October fuel exports. Brent had been down 1% earlier, so the inflation worry behind long yields gained support this morning rather than losing it.
• Japan added to global rate pressure. The Tankan's large-manufacturer index rose to +24, the highest since March 2018, and firms expect inflation of 2.6% three years out. That keeps another Bank of Japan hike on the table, though not necessarily in October.
• The Treasury's response has not held the long end. The Treasury raised its long-bond buybacks to at least $4 billion per operation from $2 billion, running September 9 to November 4, and later ran a $6 billion operation. The thirty-year has risen about 45 basis points since the 5.19% it fell to after the first announcement, so buybacks alone have not offset the supply the market is pricing.
• Chip stocks are moving against rates. Micron said customer commitments under its supply agreements rose to $32 billion. In Tokyo the Nikkei rose 3.1% on chip and AI names. Micron's own shares slipped about 1% while peers rose, after a 270% gain this year; it flagged slightly softer margins this quarter and higher fiscal 2027 operating costs.

Movers

Alphabet is up about 2% after Google launched Gemini 4 Argon, which scored a record 77.9% on the DeepSWE v1.1 coding benchmark, priced at $2 per million input tokens. Access starts with cybersecurity researchers and paying customers, so usage data is weeks away.

Accenture is up more than 10% after fourth-quarter revenue rose 6.3% to $18.7 billion, about $660 million above forecasts, alongside its fiscal 2027 outlook. The beat cuts against the view that AI tools are shrinking consulting budgets; early quotes range from about 12% to 19%.

Rocket Lab is up about 4.5% after signing a 20-launch Electron agreement with Synspective, its largest commercial Electron contract.

Zealand Pharma fell as much as 12.5% in Copenhagen after 18% of patients on survodutide stopped treatment over side effects in a late-stage trial, against 1.2% on placebo, despite 13.1% average weight loss.

What to watch

The thirty-year close against 5.644%. It traded at about 5.66% overnight and is back near 5.64%. A close above 5.644% would put long yields at levels last seen in 2001 and confirm the break. A close back under 5.60% would make the overnight high look like a spike rather than a new range. Claims at 8:30 a.m. and ISM at 10 a.m. are today's tests, and Friday's payrolls is the larger one.

ISM manufacturing at 10 a.m. Forecasts sit near 54.8 against 54.6 in August, with one forecast at 55.5 led by new orders rebounding to 57.0 from 53.7. Initial claims are expected near 201,000. A reading above 55.5 adds to the evidence of strong growth that pushed long yields up on Wednesday. A reading under 54 would test whether weaker data can lower long yields at all, since the soft inflation print did not.

Whether chip stocks stay apart from the rest of the market. Nasdaq-100 futures are up twice as much as S&P 500 futures while Dow futures earlier touched a three-month low. That pattern lasts only while chip earnings rise faster than discount rates. A ten-year above 5.34%, the overnight high in some reports, would test it. So would Micron falling below $1,000, a level that would make its higher capital spending the story for the sector. Nike reports after the close with shares near a 12-year low and is a separate test of consumer demand outside AI.