US close: Stocks fall as bond yields hit highest since 2002

8th Oct 2026 00:05

(Sharecast News) - US stocks declined on Wednesday, with the S&P 500 and Nasdaq retreating from all-time highs as bond yields hit a fresh 24-year high, while investors digested the minutes from the last Federal Reserve meeting.

The S&P 500 and Nasdaq both fell 0.2%, pulling back from record highs reached the previous session, while the Dow fell 0.7%.

"Markets slumped on Wednesday afternoon as the bond market sell-off once again dominated the agenda," said AJ Bell's head of financial analysis Danni Hewson. "Yields made fresh multi-year and, in some cases, multi-decade highs as investors reacted to ongoing inflationary pressures and high levels of government debt."

US Treasuries weakened with the 10-year and 30-year yields both hitting their highest since mid-2002 at 5.361% and 5.730%, respectively. Meanwhile, a Treasury auction saw the sale of $39bn-worth of 10-year notes at a yield of 5.300%, the highest paid in an auction since late-2000.

Oil prices erased earlier gains, with front-month Brent crude down 0.4% at $100.20 a barrel and WTI down 1.3% at $88.28 amid improving news flow about crude shipments out of the Middle East.

In other news, minutes from September's FOMC meeting showed that many policymakers were happy to wait until December for a further rate hike.

"Most participants assessed that another increase in the target range for the federal-funds rate would likely be appropriate by year end," the minutes said. "Participants emphasised, however, that they approached each meeting with an open mind and decisions at future meetings would depend on incoming information."

In equity news, banking stocks were firmly lower as bond yields rose, with Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America and Citigroup all in the red.

Constellation Brands performed well after fiscal second-quarter results topped analysts' estimates, while Micron Technology gained on the back of positive broker commentary from DA Davidson.

On the macro front, US mortgage applications fell 4.2% in the week ended 2 October, according to the Mortgage Bankers Association, marking a fifth straight decline and taking activity to its lowest level since January 2025. Applications to refinancing a mortgage, which are typically more sensitive to short-term interest rate changes, slid 7.5% on the week, while applications to purchase a home were 2.1% lower. The drop came as the 30‑year fixed mortgage rate jumped to 7.49%, its highest in nearly three years.