The 10-year Treasury yield fell 19 basis points Thursday to 4.95%. That is the largest one-day drop since March 10, 2023, the day Silicon Valley Bank failed.
The yield crossed below 5% for the first time since September 23. Rising oil usually lifts yields; Thursday, the semiconductor rout dragged them lower.
The Philadelphia Semiconductor Index fell 6.72% to 10,731.98, its lowest close since July 29. Lam Research dropped 11.76% after warning that supply-chain constraints would cap shipments through 2027.
Nvidia fell 4.40% after CEO Jensen Huang said neoclouds lack the working capital to fund growth. AMD lost 8.10% and CoreWeave sank 10.06% to a 17-month low.
That wreckage powered Thursday's bond rally. Whether the SOX holds July's lows or breaks determines if the Treasury bid extends.
Brent crude settled at $113.17, up 4% and its highest close since May 4. WTI gained 2.39% to settle at $99.47.
Reports that Trump was weighing resumed strikes on Iran after the midterm elections drove the surge. Houthi attacks on Saudi Aramco forced the company to evacuate its Dhahran headquarters.
Oil at $113 normally lifts yields. Thursday, the chip rout's flight to safety overwhelmed that signal, but the inflation implication carries into the October 28 FOMC decision.
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The Dow finished flat at 52,867.98 on a day the Nasdaq fell 2.60%, its worst session since June. The S&P 500 dropped 1.21% to 7,663.43.
Weekly claims fell to 194,000, a three-month low. Procter & Gamble gained 5.58% and Blackstone rose 8.38% after both beat estimates.
The VIX rose 14% to 14.09, but the equal-weight S&P 500 held. Whether the sector damage spreads beyond chips Friday or stays contained depends on today's data and earnings.
December gold fell about 2.7% to roughly $4,038, its lowest in more than two weeks. On most flight-to-safety days, gold rises alongside bonds.
Thursday it dropped because the trigger was oil. Brent's surge past $113 revived inflation fears, which lift real-rate expectations even when nominal yields decline.
That bond-up, gold-down split has appeared only a handful of times this year. It signals inflation fear over recession fear, and Friday's flash PMI input-cost readings will test whether that pricing is correct.
S&P Global's flash October PMIs land at 9:45 a.m. ET, with manufacturing consensus at 55.5 and services at 58.0. An above-consensus print in input costs would test whether Thursday's sharp bond rally holds.
The final Michigan sentiment reading follows at 10 a.m., consensus 46.3. The 1-year inflation expectations number matters more than the headline after oil's surge past $113.
American Express and Schlumberger report before the open. Schlumberger carries extra weight after Brent's highest close since May.
