S&P 500, Nasdaq ease from record highs as Treasury yields climb FILE PHOTO: A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 29, 2026. REUTERS/Brendan McDermid/File Photo · Reuters By Stephen Culp and Tharuniyaa Lakshmi Wed, October 7, 2026 at 2:26 PM EDT 3 min read ^IXIC -0.30% ^GSPC -0.21% ^RUT -1.15% CL=F -1.13% ^DJI -0.61% By Stephen Culp and Tharuniyaa Lakshmi
NEW YORK, Oct 7 (Reuters) - Wall Street pulled back from all-time highs on Wednesday as long-dated US Treasury yields resumed their climb, reviving fears over inflation and mounting debt.
All three major US stock indexes were modestly lower, with the S&P 500 and the Dow poised to snap their four-day winning streaks. The Nasdaq was on track for its first down day in six.
The small-cap Russell 2000 underperformed its larger cap counterparts.
In the wake of Tuesday's rally, which sent the S&P 500 and the Nasdaq to fresh record closing highs, Brent crude briefly crept above $100 per barrel and the 30-year Treasury bond yield touched a 24-year high,
Iran war-related supply concerns have led to soaring oil prices, which in turn have revived inflation worries and raised the chances of a prolonged central bank rate hiking cycle. Those concerns, combined with mounting corporate and sovereign debt levels, have caused a global bond selloff, which rattled global markets in recent weeks.
"The interest rate/oil combo is going in the wrong direction and that's causing some weakness in stocks," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "But keep in mind, this is today's move is coming off of new all-time highs in the Nasdaq and S&P, so the pullback is not unusual."
Stocks pared losses after crude prices turned lower.
Minutes from the US Federal Reserve's September monetary policy meeting, at which the central bank unanimously approved its first interest rate hike since July 2023, revealed divisions over the rationale of the increase. Some participants saw a hike as necessary to keep the impact of energy price shocks at bay, while others felt the increase was necessary to curb demand-driven inflation.
Financial markets are currently pricing in a 19.4% likelihood that the Fed will implement a second consecutive rate hike at the conclusion of its October meeting, down from 37.6% a week ago, per CME's FedWatch tool.
The Dow Jones Industrial Average fell 324.74 points, or 0.63%, to 51,196.54, the S&P 500 lost 20.09 points, or 0.26%, to 7,798.84 and the Nasdaq Composite lost 110.81 points, or 0.40%, to 27,489.08.
Among the 11 sectors in the S&P 500, industrials suffered the steepest percentage drop, while healthcare stocks led the gainers.
Following the upward march of benchmark Treasury yields, the 30-year fixed mortgage rate surged last week to a near three-year high, according to the Mortgage Bankers Association. Housing and homebuilders were down 2.3% and 2.9%, respectively.
SpaceX lost 2.8% following media reports that Elon Musk's aerospace firm was seeking $40 billion in financing to fund purchases of Nvidia chips.
Next week, third-quarter reporting season is expected to begin in earnest with a spate of high-profile financial firms expected to post results.
Investors are likely to scrutinize the extent to which massive expenditures on AI technology are beginning to show results, while also watching for clues regarding the health of the US consumer at a time of mounting inflationary pressures.
Analysts currently expect year-on-year S&P 500 earnings growth of 30.6%, on aggregate, for the July-through-September period, according to LSEG.
Declining issues outnumbered advancers by a 3.22-to-1 ratio on the NYSE. There were 81 new highs and 423 new lows on the NYSE.
On the Nasdaq, 1,427 stocks rose and 3,251 fell as declining issues outnumbered advancers by a 2.28-to-1 ratio.
The S&P 500 posted 9 new 52-week highs and 10 new lows while the Nasdaq Composite recorded 25 new highs and 223 new lows.
(Reporting by Stephen Culp; Additional reporting by Tharuniyaa Lakshmi and Shashwat Chauhan in Bengaluru; Editing by David Gregorio)
