Stocks slip as 10-year yield hits 24-year high; oil rebounds above $91 overnight
Thursday, October 8, 2026 · as of Oct 8, 6:29 AM ET · covers the prior trading session
US stocks edged lower Wednesday and small caps fell 1.3% after Treasury yields touched their highest since 2002 and Fed minutes showed broad support for more hikes. Asia and Europe sold off Thursday, while WTI jumped back above $91 on Iran tensions. For dairy, cheese and butter prices kept sliding in USDA's latest weekly survey.
Key numbers
What mattered yesterday
- US stocks slipped Wednesday: the S&P 500 and Nasdaq Composite each fell 0.22% and the Dow 0.66%, while the Russell 2000 lagged at -1.31%; utilities led sectors as investors turned defensive. Tapeboard
- Treasury yields touched their highest since 2002 intraday (10-year 5.365%, 30-year 5.732%) before easing after a strong 10-year auction that stopped through by 1.7 bp at 5.300%. Trading Economics
- FOMC minutes showed all 19 policymakers backed September's hike and most see another increase as appropriate by year-end; Trading Economics puts December hike odds near 78%. Trading Economics
- Oil whipsawed: November WTI settled $88.28 (down $1.16) Wednesday, then jumped above $91 overnight on reports of US strike planning against Iran and Gulf of Mexico shut-ins from Tropical Storm Isaias. Trading Economics
- The selloff spread overseas Thursday: KOSPI -2.62%, Hang Seng -1.4% and Nikkei -1.42%, with European indexes down about 0.5%–1.2% in early trade. Trading Economics
Market snapshot
Trading Economics index and commodity quotes are CFD/OTC-based indicative prices.
Why it mattered
Reported: Long yields hit 24-year highs on oil-driven inflation worries before a well-bid 10-year auction pulled them back (TE). August consumer credit rose $8.28B vs. $15B consensus; EIA crude stocks fell 3.19M barrels vs. a 1.7M build expected (TE calendar). Caterpillar fell 5.8% and Levi Strauss slid about 2% after hours on a cut revenue outlook; PepsiCo reported EPS of $2.34, above expectations (TE).
Our read (commentary, not investment advice): The market is pricing a Fed that is still hiking, with oil as the swing factor. Small caps and rate-sensitive names carry the most risk while the 10-year sits near 5.3%.
Today's calendar
- 8:30am ET — Initial jobless claims (prior 197K, consensus 200K)
- 10:00am ET — Wholesale inventories, Aug (prior 1.3%, consensus 0.7%)
- 1:00pm ET — 30-year bond auction (prior 5.308%)
- 1:40pm ET — Fed's Musalem speaks
- Earnings: Delta Air Lines, Progressive; PepsiCo already out
- Fri 12:00pm ET — USDA WASDE
Business lens
- Dairy (USDA, week ending Oct 3 vs Sep 26): blocks $1.4579/lb (from $1.4955), butter $1.3694 (from $1.3871), NDM $1.9369 (from $1.8692), dry whey $0.6814 (from $0.6757); barrels unavailable. September FMMO all-market average: Class III $16.04, Class IV $18.94/cwt (USDA AMS). November Class III futures settled $15.84, +15¢ on Oct 7 (Brownfield). CME spot cheese/butter for Oct 7: unavailable. Week direction: cheese and butter lower, powders firmer.
- Feed (Oct 7 settles): Dec corn $5.02 (-6¢), Nov soybeans $12.975 (-5.5¢), Dec soymeal $365.80/ton (+$11.00), Dec Chicago wheat $6.865 (-17.75¢) (Brownfield).
- Fuel: US retail diesel $6.199/gal, week of Oct 5, down 18.3¢ from Sep 28 (EIA) — before this week's crude rebound.
- Freight: unavailable.
- Rates: SOFR 3.90%; 2-yr 4.77%.
Our read: Cheese and butter under $1.50 are holding Class III near $16 and dragging Class IV's butterfat side, while higher NDM is the main support for Class IV. A $11 jump in soymeal squeezes the milk-over-feed margin even as corn eases. Diesel's weekly drop may not last with WTI back above $90, and with SOFR near 3.9% and more hikes priced, floating-rate borrowing costs aren't likely to ease soon.