Dow closes 130 points lower as Treasury yields hit multiyear highs

• The 30-year Treasury yield climbed to 5.621% (highest since June 2002) and the 10-year yield reached 5.293% (highest since June 2007), putting pressure on equities by increasing borrowing costs and making bonds more attractive.
• Market expectations for a 25-basis-point Fed rate hike at the October meeting declined to 51.5% from nearly 70% after New York Fed President John Williams suggested policymakers could take time to assess incoming data.
• Job openings fell to 7.079 million in August (below the 7.225 million estimate) and consumer confidence dropped to a nearly 12.5-year low in September as households expect deteriorating business and labor conditions amid geopolitical tensions and higher rates.

Market Summary: Treasury Yields Pressure Equities

Market Performance:

US stocks closed lower Tuesday as Treasury yields surged to multiyear highs. The Dow Jones fell 136 points (-0.26%) to 51,345.41, the S&P 500 declined 0.14% to 7,672.57, and the Nasdaq Composite dropped 0.08% to 26,802.66. This followed Monday's sharper losses, with the Dow down over 300 points.

Treasury Yield Surge:

The 30-year Treasury yield hit 5.621%, its highest level since June 2002, while the 10-year yield climbed to 5.293%, the highest since June 2007. The 2-year yield rose to 4.96%. Rising yields increase borrowing costs and make fixed-income assets more competitive versus equities, pressuring stock valuations.

Fed Policy Outlook:

Market expectations for a 25-basis-point rate hike at the October Fed meeting dropped to 51.5% from 70% after New York Fed President John Williams suggested policymakers could take time to assess data. However, other Fed officials including Governor Michael Barr and Chicago Fed President Austan Goolsbee indicated additional rate increases may be needed.

Economic Data:

Job openings fell to 7.079 million in August (below the 7.225 million estimate), and consumer confidence dropped to a 12.5-year low in September. Investors await critical releases including Wednesday's PCE Price Index and Friday's payrolls report.

Notable Movers:

OpenAI is targeting a valuation above $2 trillion amid rapid AI growth. CarMax gained on stronger Q2 results, while Fair Isaac stock activity was noted. Meta and other AI-related stocks remained in focus despite broader market weakness.

Month-to-Date: The S&P 500 and Dow are down 0.3% and 3.7% respectively for September, while the Nasdaq remains up over 1%.