10-Year Treasury Yield Tops 5.1% as Traders Weigh 6% Threshold, Stocks Slide

The 10-year U.S. Treasury yield rose 14.7 basis points to 5.113% on Wednesday, its highest since July 2007, triggering a broad selloff in equities as investors began evaluating 6% as the new risk threshold. The Dow Jones Industrial Average fell 352.10 points, the S&P 500 lost about 0.7%, and the Nasdaq Composite dropped 1.13%, a day after setting a record close. The selloff followed stronger-than-expected S&P Global flash U.S. data: manufacturing activity expanded at its fastest pace since July 2021, while the services index hit a near five-year high of 58.7. CME FedWatch showed odds of an October rate hike rising to roughly 69% from 55%, with near-95% probability of at least one more increase by December. The 2-year yield climbed 11.8 bps to 4.893% and the 30-year added 9.9 bps to 5.401%, its highest since 2004. Treasury buybacks have done little to cap long-end yields. JPMorgan analysts said structural shifts may have lifted the stock-market pain threshold to 5.5%–6.0%, while emerging markets saw their largest bond fund outflows in months.