The 10-year Treasury yield closed near 5.24% Monday. That is its highest level since 2007, before the financial crisis, and higher than at any point in 19 years.
The 30-year is at its highest since 2004. The 5-year crossed 5% for the first time since 2007. Every other market on the screen yesterday traded in that shadow.
The S&P 500 fell 0.77% to 7,683.69 and the Nasdaq lost 0.92% to 26,820.38. The losses followed rate sensitivity more closely than the Iran headline.
Communication services fell 1.56% and consumer discretionary fell 1.43%. Only health care, staples and energy finished higher. Stocks go into today tied to whatever the 10 a.m. data does to yields.
Gold fell about 3.2% to roughly $4,149 an ounce, per USAGOLD, its lowest since Aug. 5. It now sits about 27% below its January peak near $5,600.
Normally a war headline helps gold. Yesterday, a 5.2% Treasury yield and a firm dollar index at 101.22 outweighed it, and silver fell 4.3%. Gold is now trading on rate expectations, so this morning's data matters more to it than any news from Hormuz.
Oil made the loudest headline and kept the least of it. Brent jumped more than $4 after President Trump rejected Iran's offer to reopen the Strait of Hormuz, then settled up just 0.9% at $105.28.
WTI gained 0.2% to $92.60. Reports of Qatari-mediated talks with both sides coincided with the fade.
The gap between the intraday spike and the settle is the hidden number. Bonds and gold kept pricing the inflation risk after crude gave it back, and any news from the talks today hits oil first.
The rate path ties all of it together. CME FedWatch put the odds of an October hike at 70.3%, up from 64.2% a day earlier. The Fed already raised rates by 25 basis points in September.
The 2-year yield rose about 8 basis points to 4.93%, which points to the market pricing Fed policy and not just long-term risk. Fed Governor Lisa Cook named oil pass-through as an inflation pressure Monday, and today's Fed speakers can move that 70% figure directly.
The S&P CoreLogic Case-Shiller 20-city home price index comes out at 9 a.m. ET. Consensus is 2.2% year over year.
JOLTS job openings and Conference Board consumer confidence both come out at 10 a.m. ET. Consensus is 7.23 million openings, down from 7.27 million, and a confidence reading of 90.1, up from 89.4.
A strong openings number would add to the case behind the yield move. A weak one would be the first data this week to push against it.
Five Fed officials speak today, including New York Fed President John Williams and Governor Christopher Waller. The API crude inventory report comes after the close, and the Qatari talks are the open question for oil.
