The S&P 500 closed at a record 7,818.93 on Tuesday, up 0.58%. It got there with the 10-year Treasury at 5.275%.
Monday's 5.315% close was the highest 10-year yield since 2002. Stock records and yields not seen in 24 years rarely show up on the same day, and today's auction tests whether they can keep doing so.
Rates
The 10-year fell 3.6 basis points and the 2-year fell 4.2 to 4.791%. A one-day dip that size barely dents a climb that already took the 10-year past its 2007 peak.
The Treasury brings $39 billion in 10-year notes to market today. A September 24 sale drew 57.2% from indirect bidders against a 64.6% average, so foreign demand is the figure to read at 1 p.m.
Tech
The Nasdaq rose 0.45% to 27,599.79, its second straight record. AMD gained 2.80% after its CEO said AI chip demand still outruns supply.
The gains came from very few stocks. Nvidia, Apple and Microsoft now make up more than 21% of the S&P 500, well above the 13.4% that IBM, AT&T and Exxon reached at their 1980s peak.
That concentration helps explain how the index can climb with yields above 5%. Constellation Energy jumped 14.84% on a 20-year nuclear deal with Google, which pulls utilities into the same trade.
Small Caps
The Russell 2000 fell 0.57% to 2,830.97, led lower by healthcare. Smaller companies tend to carry more floating-rate debt, so they feel 5% yields before the megacaps do.
The gap between the Russell and the S&P is the clearest sign of how much rate pressure the market is absorbing. A weak bid at 1 p.m. would show up there first.
Commodities
WTI crude fell 1.86% to $87.77 and Brent fell 1.64% to $98.67. Oil above $100 was part of the case for September's quarter-point hike, the Fed's first since July 2023.
Gold rose 0.71% to $4,186.20 as yields and the dollar slipped. WTI is up 0.58% this morning, so Tuesday's oil relief is already being tested.
The Day Ahead
Futures are soft, with the Dow down about 108 points and the S&P 500 flat. Constellation Brands is lower after beer depletions missed estimates by 70 basis points, even though profit and sales beat.
The EIA's weekly crude inventory report is due at 10:30 a.m. A draw would add to this morning's oil rebound, which would work against the dip in yields.
The $39 billion 10-year auction results come out at 1 p.m. A weak bid at 2002-level yields would hit hardest in the small caps that lagged Tuesday.
The September FOMC minutes follow at 2 p.m. Sixteen of 18 officials projected another hike this year, expectations for an October move have faded.
Any sign in the minutes of a faster pace of hikes would show up in the 2-year yield first. August consumer credit closes the calendar at 3 p.m.
