The 10-year Treasury yield closed at 5.315% Monday, up 3.8 basis points to a 52-week high. Last Thursday it touched 5.33%, its highest level since 2002.
September alone added more than 50 basis points, the largest monthly jump since September 2022. The Nasdaq still closed at a record Monday.
Stocks ignored the bond market
The Nasdaq Composite rose 1.05% to 27,477.31, a record close, per AP. Nvidia gained 2.12% to an all-time high of $238.90.
The S&P 500 added 0.66% to 7,773.99, within 0.3% of its summer record. The Dow managed only 0.18%, so the rally was narrow and leaned on tech and deals. PTC jumped 34% on Schneider Electric's $22.6 billion bid.
Futures were up 0.2% early, leaving the S&P one solid session from a new high.
The long end did the work
The 2-year was flat at 4.823%. The 30-year rose 4 basis points to 5.670%, also a 52-week high.
That widened the gap between 2-year and 10-year yields to about 49 basis points. With payrolls up just 29,000 and the Fed recently hiking a quarter point, a flat front end is consistent with the pressure coming from heavy borrowing rather than rate expectations.
The 10-year eased to 5.269% overnight. Today's 3-year auction tests how much demand sits beneath that relief.
The dollar climbed, and gold climbed too
The dollar index rose to 102.53, its highest in more than a year, as the euro weakened. Gold rose 0.65% to $4,189.50 anyway, even with the dollar and yields both pushing against it.
Gold gave that back overnight and traded near $4,120 Tuesday morning, about 12% below its August high of $4,692. The dollar slipped toward 102.00 as French yields eased.
Oil is the overnight relief
Brent swung between $100 and $103 Monday. Analysts cite oil above $100 as one driver of September's yield surge.
Overnight, Brent fell 2.0% and WTI 2.2% as Persian Gulf exports recovered and emergency stockpiles were released. That drop may explain part of the 10-year's overnight easing. The EIA's Short-Term Energy Outlook at noon ET will be the first official read on supply since the drop.
The day ahead
Weekly ADP private payrolls arrive at 8:15 a.m. ET, after a prior reading of 20,000. Another soft print would add to last month's 29,000 payroll gain.
The August trade balance follows at 8:30 a.m. ET, with consensus at a $95.2 billion deficit against $88.6 billion prior. A wider gap would weigh on the Atlanta Fed's 3.7% GDPNow estimate.
New York Fed President John Williams speaks at 9:05 a.m., Governor Michelle Bowman at 10:45 a.m., and Kansas City Fed President Jeffrey Schmid at 1:15 p.m. ET. Any comment on long-end yields at 5.3% matters more than one about rate policy.
The 3-year note auction prices at 1:00 p.m. ET, against a prior yield of 4.474%. A soft bid there would spread the selling from the long end into the middle of the curve.
