Long Treasury yields close at a 24-year high on hot service prices as the Nasdaq sets a record

Methodology note: Night report, generated after the October 5 US close. Sources cited inline.

The 30-Year Yield Closed Above Its 2002 High After Service Prices Jumped, While the Nasdaq Set a Record

The thirty-year Treasury yield closed near 5.661%, above the 5.644% 2002 high this report has used as its line for renewed long-bond pressure, after the ISM services prices index rose to 74.0, its highest since July 2022. Intraday it reached 5.703% and the ten-year 5.349%, before both gave back about half the rise. Stocks did not follow bonds: the Nasdaq Composite closed at a record and Nvidia at a record $238.90. Two readings are possible. Investors may be demanding more yield to hold long bonds whatever the Fed does, which the stock market has not priced. Or the long end is repricing inflation while growth holds up, which stocks can carry. A thirty-year close back under 5.644% would weaken the first reading; a ten-year close above 5.349% would strengthen it.

• The ISM services prices index rose 1.4 points to 74.0 against a 72.9 forecast, while the employment index returned to 50.1 after two months of contraction. Service prices are rising alongside factory prices, and hiring in services stopped shrinking.
• The ten-year rose about 3 basis points to 5.307% and the thirty-year about 3 basis points to 5.661%, after intraday highs of 5.349% and 5.703%, the highest since 2002. Half of the day's rise came off by the close, ahead of three Treasury auctions this week.
• The Nasdaq rose 1.05% to a record 27,477.31 and the S&P 500 rose 0.66%, with Nvidia up 2.1% to a $5.76 trillion market value. Large technology stocks carried the index on a day long yields set new highs.
• The dollar index rose 0.33% to about 102.27 after touching 102.53, its highest since April 2025. The euro's slide on Spanish and French political risk kept the dollar above 102 through the US session.
• October hike odds stood near 19% on CME FedWatch on Monday morning, against about 64% two weeks ago. Long yields rose without help from the expected Fed path for a second session.

October 5, 2026 Close

Why it happened

The morning report's read was mixed. It was right that European stress would not reach US stocks and that the dollar would hold above 102. It was wrong that the stress would pass through currencies rather than Treasuries: by the afternoon long yields had set new highs as well.

• Service prices undercut Friday's labour read. Friday's 29,000 payrolls argued the economy was cooling. Monday's ISM said service prices are rising at the fastest pace since 2022, with fuel up for an eighth month and memory products for a ninth, and services employment back above 50. Those are the inputs a long-bond investor uses for inflation over years, not for the October meeting, which is why the thirty-year rose while hike odds stayed near 19%.
• Europe added to the pressure but did not cause it. French stocks fell to a six-month low on fiscal concerns while the STOXX 600 rose 0.5%, so the selling was in French assets rather than European risk broadly; US yields rose after the ISM release, hours after the euro's low.
• Oil limited the rise. WTI fell about 2% to near $89 after Saudi Arabia's price cut to Asia, which is the likeliest reason yields came off their highs in the afternoon rather than extending.
• Stocks were carried by a few large names. The Nasdaq gained 1.05% against the Dow's 0.18%, and the VIX rose 0.90 points on an up day, so investors were paying more for protection while buying the index. A rally led by Nvidia, Microsoft and Meta is narrower than one led by small caps and cyclicals, and more exposed to a higher discount rate if long yields keep rising.

Movers

PTC rose about 34%, the best performer in the S&P 500, after Schneider Electric agreed to buy it for $205 a share in cash, about $22.6 billion; Schneider fell about 7.2% in Paris and was the biggest drag on the CAC 40, and PTC now trades against the cash price.

Intel fell about 4% after Elon Musk confirmed talks with TSMC about joining his Terafab chip venture in Texas, where Intel had been the only named partner; TSMC's US shares rose about 2% and SpaceX about 7.6%, though Musk called them "just discussions" and TSMC has said nothing.

Vaxcyte rose about 30% on positive Phase 3 results for its pneumococcal vaccine in adults aged 50 and over.

Itau Unibanco and Banco Bradesco rose about 16% and 19% in US trading after Flavio Bolsonaro edged out President Lula by about 2 percentage points in Sunday's Brazilian election.

What to watch

The thirty-year above its 2002 high, through three auctions. At 5.661% it has closed above 5.644% for the first time, and the Treasury sells three-, ten- and thirty-year debt on Tuesday, Wednesday and Thursday. Weak demand at Thursday's thirty-year sale would add a supply explanation to the inflation one. A close back under 5.644% by Friday would say Monday's break did not hold; a close above Monday's 5.703% intraday high would extend it.

Record technology stocks against a 5.3% ten-year. Nvidia and the Nasdaq set records with the ten-year 4 basis points under its intraday high. Stocks have absorbed higher long yields because hike odds were falling, and Monday the odds did not move while yields rose. A ten-year close above 5.349% with the Nasdaq lower would show the discount rate reaching the leaders; an S&P 500 close under 7,666.45 would show the index following.

The dollar above 102 and Europe's bond spreads. The dollar index held its break all session, driven by the euro rather than US rates. Wednesday's Fed minutes are the US test: minutes showing several officials open to more hikes would add a rate reason to the euro reason. A dollar back under 102 would mark Monday as a reaction to Spain's election call rather than a trend.

Next 5 Trading Days

Tue Oct 6 — Three-year note auction and bids on the last 40 million barrels of US emergency oil reserves. Tests short-end demand and remaining fuel-price support.

Wed Oct 7 — Ten-year auction and minutes of the September Fed meeting at 2 p.m. Shows how many officials wanted further hikes.

Thu Oct 8 — Thirty-year auction, PepsiCo results and jobless claims. The auction tests demand for long bonds at a 24-year high in yields.

Fri Oct 9 — Delta Air Lines results. Shows how Brent near $100 is reaching airline costs and fares.

Mon Oct 12 — Columbus Day; the bond market is closed while stocks trade. Leaves the week's auction results to stand over a long weekend.