10-year Treasury yield drops below 5% on safety rush — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- 10-year Treasury yield plunged more than 17 basis points to 4.972% on Thursday — the first close below 5% since Sept. 23 and the biggest one-day decline since March 10, 2023.
- 2-year Treasury yield tumbled 16+ basis points to 4.659%, while the 30-year Treasury yield dropped 14+ basis points to 5.296%, reflecting a broad-based flight to safety across the curve.
- Oil prices spiked after a New York Times report that the U.S. and Israel are weighing a 'short but intensive' operation to resume strikes on Iran after the Nov. 3 midterms, with WTI closing up 2.39% at $99.47/barrel and Brent jumping 4% to $113.17/barrel.
- Nvidia CEO Jensen Huang told CNBC Thursday that neocloud demand is 'off the charts' but capital is scarce, intensifying investor scrutiny of the billions being deployed to build AI infrastructure.
- Mitch Goldberg of ClientFirst Strategy attributed the bond rally to fears over bond issuance by AI-related companies, while Larry Holzenthaler of Catalyst Funds said Treasurys are 'enjoying haven status' for the first time in a while amid tech weakness, Middle East escalation, and higher oil.
- Gregory Faranello of South Street Securities warned that if energy prices stay elevated, it could 'force the Fed's hand to do even more, which certainly wouldn't be a good thing for the bond market.'
Why it matters: With the 10-year back below 5%, mortgage and auto loan pricing could ease modestly, but Brent above $113 threatens to reignite inflation and constrain the Fed's room to cut. The simultaneous tech selloff and bond rally — plus Huang's own admission that AI capital is scarce — signals investors are repricing AI infrastructure risk while hedging against a potential U.S.-Israel strike on Iran.
Ask SkimNews
