10-Year Treasury Yield Plunges Below 5% in Largest One-Day Drop Since 2023 Bank Crisis

The 10-year U.S. Treasury yield tumbled 19.3 basis points to 4.952% on Thursday, marking its largest single-day decline since March 10, 2023, as a tech-led equity selloff and escalating Middle East tensions drove investors into safe-haven bonds. The 2-year yield, more sensitive to rate policy, fell 18.8 basis points to 4.635%, its biggest one-day drop since August 1, 2025. Bond prices rise as yields fall. The flight to safety accelerated as the Philadelphia Semiconductor Index plunged nearly 7%, the Nasdaq dropped 2.6% and the S&P 500 fell 1.21%. Sandisk (SNDK) slid 8.51% and Micron (MU) lost 6.26%, though both remain up roughly 430% and 200% year-to-date, respectively, per FactSet. PGIM's Robert Tipp cited Middle East tensions, unrest in France and mounting AI concerns as drivers. Mackenzie's Dustin Reid noted investors are locking in profits and rotating into fixed income, while short-covering in the $32 trillion Treasury market amplified the rally. Traders are also reassessing whether the Fed can keep hiking given equity weakness and elevated oil prices. CFRA's Sam Stovall said defensive sectors remain relatively stable, with the move reflecting position unwinding rather than broad recession fears.