U.S. stocks finished slightly higher on the first trading day of October as Treasury yields pulled back from their highest levels in more than two decades, helping major indexes recover from earlier losses.
The S&P 500 gained 0.19% to close at 7,666.45, while the Nasdaq Composite rose 0.04% to 26,871.60. The Dow Jones Industrial Average added 20.51 points, or 0.04%, ending the session at 50,926.56.
Treasury markets remained the main focus. The 10-year Treasury yield climbed as high as 5.344% intraday, reaching its highest level since 2002. The 30-year yield also touched levels not seen in 24 years before both maturities reversed lower.
“I think there’s some fatigue in the bond market,” said Jeff Kilburg, CEO of KKM Financial, noting that yields had moved about 50 basis points in 18 trading sessions following Fed Chairman Kevin Warsh’s remarks at Jackson Hole. He also pointed to hopes that the move toward 5% yields could prove temporary, while noting that an Iranian resolution would be needed for that outlook.
Traders work on the floor at the New York Stock Exchange in New York City, U.S., Sept. 29, 2026. Jeenah Moon
Yields Reverse as Oil Adds Pressure
By late morning, Treasury yields had turned lower. The 10-year yield was down 5 basis points, while the 30-year yield fell 3 basis points. The move was sharper at the front end, with the two-year yield dropping nearly 10 basis points to 4.793%.
Recent market trading has reflected an inverse relationship between Treasury yields and stocks, with equities generally gaining when yields decline. However, rising oil prices continued to weigh on investor sentiment.
West Texas Intermediate crude futures rose 2.7% to settle at $92.87 a barrel as traders monitored developments surrounding the Iran conflict and President Donald Trump’s next steps.
Micron was another standout. Shares gained 3% after the memory-chip maker reported a sharp increase in quarterly revenue, which nearly quadrupled from a year earlier. CEO Sanjay Mehrotra also said the company plans to raise employee compensation, a move expected to weigh on margins relative to Wall Street expectations.
Meanwhile, investors were also watching the two-year Treasury yield for clues about the Federal Reserve’s October decision. Baird Private Wealth Management investment strategist Ross Mayfield said the decline suggested markets were reducing expectations for another rate hike, with upcoming jobs data potentially playing an important role in shaping that outlook.
