The 10-year Treasury yield touched 5.045% on Tuesday, 15 September 2026, its highest since 2007 and past the peak it set in 2023. TheStreet reported the move as the Federal Reserve opened a two-day policy meeting.
Stocks sank into the close. The S&P 500 lost 0.45% to finish at 7,585.73, the Dow fell 0.63% to 52,093.11, and the Nasdaq Composite shed 0.78% to 25,981.57. The Russell 2000 slid 0.86%. Only energy (up 1.9%) and materials (up 0.32%) rose among S&P sectors, while consumer discretionary dropped 1.98% and utilities 1.15%.
A hike all but priced in
Traders widely expected the Fed to raise rates on Wednesday in response to hotter inflation, which TheStreet tied to the Iran war. Daniela Hathorn, a senior market analyst at Capital.com, said a 25 basis point hike was “now almost fully priced.” The bigger question, in her view, was whether Kevin Warsh would present it as “a one-off recalibration” or signal that more tightening was coming.
The rest of the Treasury curve moved up too. The 2-year yield rose to 4.671%, a 52-week high, and the 30-year stood at 5.369%.
Oil above $100
Brent crude held firmly above $100 a barrel, Hathorn said, after attacks on Saudi infrastructure and continued disruption around the Strait of Hormuz raised fears about Gulf supply. She described a feedback loop: higher energy prices threaten growth, yet make it harder for central banks to say inflation is beaten. The dollar, she noted, has gained from higher yields and rate-hike bets, while equities face pressure as borrowing costs climb.
AI worries add to the drag
Monday’s selloff had already hit chip stocks, after prominent AI executives called for slower development on safety grounds. Hathorn called it partly “a repricing of crowded positioning,” arriving at a sensitive moment given concerns over AI spending, valuations and the growing use of debt to finance infrastructure.
“Markets remain cautious ahead of Wednesday’s Federal Reserve decision,” she said, citing “$100-plus oil, elevated bond yields and renewed questions around the AI trade.”
