Traders work on the floor of the New York Stock Exchange during morning trading on September 14, 2026 in New York City.
Michael M. Santiago | Getty Images
Stocks fell on Tuesday as U.S. Treasury yields rose to multi-year highs as traders looked ahead to this week’s Federal Reserve policy decisions that could have ripples through the economy.
of Dow Jones Industrial Average Lost 280 points (0.5%). of S&P500 It fell about 0.1%. Nasdaq Composite.
The S&P 500 and Nasdaq’s declines were tempered by gains in many artificial intelligence-related stocks that had been under pressure the previous trading day. Nvidia and micron technology Although it increased by 1%, advanced micro device and intel It rose more than 2%.
Benchmark yields rose on Tuesday. 10 year treasury The note rose to its highest value since 2007, reaching 5.041%. Bond yields and prices move in opposite directions. The yield has since broken off its all-time high, rising more than 4 basis points to 5.004%.
US 10-year Treasury yield
Global government bond yields have been the focus of stock market attention in recent weeks, with bond sales amid growing concerns that the ongoing U.S.-Iranian war will accelerate inflation and make central banks more hawkish.
Oil prices also rose slightly after Saudi Arabia shut down a vital pipeline that bypasses the Strait of Hormuz. brent futures The closing price exceeded $105 per barrel, west texas intermediate crude oil To make a payment of $101 or more. Oil prices rose on Tuesday, with Brent crude oil futures for November delivery up 1% to over $107 a barrel, and WTI futures up 1% to over $103.
The Fed’s expected rate decision on Wednesday is also weighing on traders as Treasury yields and oil prices continue to rise. According to federal funds futures contracts, there is about a 90% chance that the federal funds rate will increase by a quarter of a percentage point from its current target rate range of 3.5% to 3.75%. This decision could have implications for the global economy.
“We expect the Fed to raise interest rates to the cap of 4.0% at this week’s meeting (for the first time under Kevin Warsh as chairman),” said Christopher Hodge, chief U.S. economist at Natixis CIB Americas.
“I think this decision is individual and will emphasize in subsequent meetings that it does not pre-commit the Fed to any action, but rather gives him and the committee maximum flexibility to respond to shocks,” he added.
Barclays strategists said in a note Tuesday morning that rising interest rates are already weighing on valuations and exposing equity portfolios to increased risk.
“Earnings have offset the drag so far, but the 10-year yield moving closer to the 5% threshold marks a historically significant inflection point, above which rates typically create a more persistent headwind for equities,” he said. “With inflation risks lingering and yields trending upwards, it may become increasingly difficult to maintain the cushion of earnings growth.”
“Our base case remains positive for equities, supported by continued earnings momentum, but the risk of another price rally increases if yields rise significantly above current levels,” it added.
