By William Collins, consultant in stock markets – Eurasia Business News, October 1st, 2026. Article no 3190
U.S. Treasury markets staged a volatile reversal on Thursday, October 1st, after the 10-year yield briefly climbed to its highest level since 2002. The benchmark yield touched roughly 5.34% before retreating to 5.233%, offering some relief to stocks after a global bond selloff pushed borrowing costs in the United States, Europe and Japan to multi-decade highs.
The reversal reflected renewed demand for U.S. and German government debt, even as French, Italian and Greek bonds came under further pressure. Investors appeared to distinguish more sharply between sovereign borrowers with different fiscal and political risks, while some hedge funds unwound crowded trades that had bet on French bonds outperforming.
Treasury Yield Retreats After 5.34% Peak
The 10-year Treasury yield surged to approximately 5.34% in early trading, exceeding the previous day’s high and marking its highest level since 2002. The 30-year yield also rose toward 5.68%, while government borrowing costs increased across major developed markets.
Treasury yields rise when investors sell bonds, causing their prices to fall. The latest global bond-market pressure has been driven by persistent inflation risk, elevated energy prices, heavy government borrowing and expectations that interest rates could remain high for longer.
By the end of Thursday’s session, the 10-year yield had fallen to 5.233%, down around five basis points from the previous close. The pullback helped stocks recover from their lows, but it did not change the broader reality that long-term borrowing costs remain near levels last seen more than two decades ago.
| Bond-market measure | October 1 reading | Why it matters |
|---|---|---|
| U.S. 10-year Treasury yield | 5.34% intraday; 5.233% close | Highest intraday level since 2002 |
| U.S. 30-year Treasury yield | Near 5.68% intraday | Long-duration borrowing costs at multi-decade highs |
| French 10-year OAT yield | Briefly near 4.96% | Near the key 5% threshold |
| German 10-year Bund yield | Around 3.51% after easing | Safe-haven beneficiary in Europe |
The third quarter was particularly punishing for bonds. The 10-year Treasury yield rose 87 basis points during July through September, its largest quarterly increase since 1994.
France and Italy Under Pressure
European sovereign debt markets remained a focal point. France’s 10-year OAT yield briefly jumped another 10 basis points toward 4.96%, close to the symbolic 5% level, following its worst quarterly bond performance since 1987.
French bond yields have risen as investors question the credibility and political viability of the government’s fiscal-repair plan. Paris is attempting to reduce its deficit while public debt is projected to exceed 120% of GDP in 2027. The yield spread between French OATs and German Bunds remains near its widest level since the eurozone debt crisis of the early 2010s.
Italian and Greek debt also weakened. The moves suggested that investors were reducing exposure to eurozone sovereigns perceived as vulnerable to high debt, slower growth and political uncertainty.
By contrast, U.S. Treasuries and German Bunds drew fresh buying interest. This “flight to quality” helped reduce U.S. and German yields, even though both countries’ borrowing costs remain much higher than at the start of the year.
Oil Prices Stay Above $100
Oil prices remained elevated amid unresolved uncertainty over Middle East supply routes. Brent crude traded near $101.58 per barrel, while West Texas Intermediate crude was around $90.79.
Higher energy prices have been a central concern for bond investors because they can prolong inflation. If fuel, transport and industrial-input costs remain elevated, central banks may find it harder to cut interest rates—or may need to keep policy restrictive for longer.
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Market participants continue to follow developments surrounding the Strait of Hormuz, U.S.-Iran diplomacy and the restoration of Gulf exports. Partial recovery in crude flows has eased the most acute supply fears, but Brent around $100 still represents a substantial inflation risk for global markets.
Stocks and Semiconductor Shares
U.S. equities were mixed. The Nasdaq Composite fell 0.26%, while the Philadelphia Semiconductor Index gained 0.37% after being higher earlier in the session. Technology stocks initially benefited from the bond-market reversal but lost momentum later in the day.
Micron Technology fell 2.3% to about $1,040 despite reporting quarterly results and guidance above Wall Street estimates. Investors focused on the company’s expectation that gross margin could decline to about 86.25% in the current quarter from 87%, alongside higher operating expenses in fiscal 2027.
Micron Chief Executive Sanjay Mehrotra said memory and storage supply-demand conditions could tighten through fiscal 2027 and 2028. The company’s shares have nearly quadrupled this year, leaving investors sensitive to any sign of margin pressure or execution risk.
A Susquehanna research note also cut its forecast for global smartphone shipments in 2026 to 1.09 billion units, a 13% year-over-year decline. The firm cited deteriorating memory supply and expected weakness in third- and fourth-quarter handset demand.
Nvidia fell back to about $228 after reaching an intraday high near $232. AMD declined around 1%, and Broadcom fell 1.3%. Oracle, meanwhile, held a gain of roughly 0.8% after surrendering a stronger premarket advance.
Broadcom-Anthropic AI Financing Deal
Broadcom drew attention after reports that it agreed to provide Anthropic with up to $42 billion in financing for AI infrastructure spending. The funding could help finance roughly one-third of Anthropic’s $125.2 billion, five-year commitment to lease tensor-processing-unit computing capacity.
The arrangement reflects the enormous capital requirements of frontier AI development. It also highlights growing scrutiny of “circular” financing structures, where a chip supplier can become both a technology provider and a lender to a major customer.
Broadcom’s potential notes could be convertible into Anthropic equity, while the company retains the option of adding a financing partner. Anthropic said it did not expect to issue the notes before completing its IPO.
Gold and Silver Prices in Dollars
Gold and silver advanced as the retreat in Treasury yields and softer inflation expectations supported precious metals. Spot gold traded near $4,181.80 per ounce, up 0.62%, while spot silver was around $61.09 per ounce, up 1.33%, in early U.S. trading.
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The gains were constrained by still-high long-term yields and a firm U.S. dollar. Gold remains caught between safe-haven demand linked to geopolitical risks and the higher opportunity cost of holding a non-yielding asset when Treasury yields are near 5.3%.
Investors will next watch the September U.S. employment report, inflation indicators and any further developments in the Middle East. Until long-term yields clearly stabilize, volatility in bonds, commodities and technology shares is likely to remain a defining feature of global markets.
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© Copyright 2026 – Eurasia Business News. Article no. 3190
