US Treasuries Surge as Tech Selloff Drives Yields to Three‑Year Low
TL;DR
- US 10‑year Treasury yield fell 36 bps in October, biggest monthly drop since Dec 2023
- Tech stocks, notably Amazon and Intel, saw sharp declines, pushing investors toward safe assets
- Fed signals a likely December rate hike, keeping rates higher for longer
- Yield curve remains steep, with 2‑year/10‑year spread at 34.6 bps
- TIPS breakeven rates suggest inflation expectations around 2.3% over the next decade
U.S. Treasury prices rallied on Friday, with the benchmark 10‑year yield falling 36 basis points in October, the largest monthly decline since December 2023. The drop followed a sharp selloff in technology stocks, as investors moved into safer assets. The Nasdaq fell more than 2% after earnings reports from Amazon and Intel rattled investors, who were already concerned about rising AI costs. The 10‑year yield closed the month at 4.925%, down 6.4 basis points, while the 30‑year yield fell 1.9 basis points to 5.31%. The two‑year yield dropped 8.1 basis points to 4.575%, its biggest monthly fall since August 2025. The 2‑year/10‑year spread remained steep at 34.6 basis points. Despite the rally, expectations for a December U.S. interest‑rate hike remain high. The Federal Reserve left rates unchanged this week but upgraded its assessment of the economy, and rate futures price in about a 70% chance of a quarter‑point hike in December. Dallas Fed President Lorie Logan said the central bank needs to raise rates at least two more times to control inflation. The yield curve’s steepness and the TIPS breakeven rates—2.461% for five‑year TIPS and 2.336% for 10‑year TIPS—indicate that markets expect inflation to average around 2.3% over the next decade.
Why It Matters
The movement in U.S. Treasury yields reflects investor sentiment toward economic growth, inflation, and monetary policy, factors that influence borrowing costs for businesses and consumers in the United States, Canada, and India. A lower 10‑year yield can reduce borrowing costs for U.S. and Canadian borrowers and may affect global capital flows, while Indian investors and companies that hold U.S. debt or invest in U.S. markets will monitor these shifts for implications on portfolio returns and currency dynamics. The potential December Fed rate hike signals continued tightening, which can impact global interest rates and economic conditions across the three countries.
Oct 31, 2026 · Updated 10/31/2026, 12:06:10 PM · Reported with: The Economic Times Markets
Sources (1)
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