Dow falls 350 points as 10 year Treasury yields hit 5.1%

• The 10-year Treasury yield hit 5.1%, a 2007 high, while the 2-year yield reached 4.947% after September PMI data showed US business activity at a five-year peak, driving Fed rate hike probability for October from 8.8% a month ago to over 66%.
• Technology stocks led declines with the Nasdaq falling 1.13%; Alphabet dropped 3%, Nvidia fell 1.2%, and Amazon declined 2.2%, though Meta rose 1% on strong AI assistant reception.
• Oil prices surged (Brent up 4.4% to $103.67, WTI up 2.6% to $92.91) amid escalating US-Iran tensions, compounding inflation fears and adding pressure on rate-sensitive sectors like utilities, which fell 1.72%.

Market Summary: Stocks Fall as Treasury Yields Surge to Multi-Year Highs

Key Market Movements:

US equity markets closed sharply lower on Wednesday, September 23, 2026, as rising Treasury yields and geopolitical tensions pressured risk assets. The Dow Jones fell 352 points (-0.68%) to 51,511.59, the S&P 500 declined 0.75% to 7,706.05, and the Nasdaq dropped 1.13% to 26,936.04.

Treasury Yields Hit 2007 Levels:

The 10-year Treasury yield climbed to 5.1%, its highest level since July 2007, marking the largest one-day move since April 2025. The 2-year yield reached 4.947%, the highest since May 2024. Strong September PMI data showing business activity at five-year highs fueled rate hike expectations.

Fed Rate Hike Probability Surges:

The CME FedWatch Tool now shows a 66% probability of a 25-basis-point rate hike in October, up from 55.4% the prior day and just 8.8% a month ago. Fed Governor Michael Barr indicated further policy adjustments may be needed as inflation remains above the 2% target.

Sector Performance:

Nine of 11 S&P 500 sectors declined, with utilities down 1.72% and communication services falling 1.49%. Technology stocks led losses, with Alphabet dropping 3%, Amazon falling 2.2%, and Nvidia declining 2%. Meta Platforms bucked the trend, rising 1% on positive reception to its Muse AI assistant.

Oil Prices Spike:

Brent crude surged 4.4% to $103.67/barrel and WTI gained 2.6% to $92.91 amid Iran-US tensions, further stoking inflation concerns.

Valuation:

The S&P 500 trades at just under 19x expected earnings, its lowest valuation since 2023.