US bond yields fall amid tech stock sell-off — CNBC

In the United States, government bond yields declined after investors began taking profits in technology stocks and moving into bonds as a safer asset. CNBC reports that the yield on benchmark 10-year US Treasury bonds fell by more than 13 basis points to 5.056%.

Decline in yields

The yield on 30-year Treasury bonds also declined by more than 13 basis points to 5.385%. The yield on two-year notes fell by more than five basis points to 4.745%.

One basis point equals 0.01 percentage point. Bond prices and their yields move in opposite directions.

Investors' shift into bonds took place amid a broader avoidance of risky assets. Concerns over higher inflation and interest rates, as well as their potential impact on the boom in artificial intelligence spending, triggered a sell-off in technology company shares that had previously risen significantly.

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Inflation came in higher than expected

The US producer price index rose by 6.3% year-on-year in September, the largest increase since 2022. Economists surveyed by Dow Jones had expected an increase of 5.5%.

Previously released consumer price data also exceeded expectations: the measure of the cost of goods and services in the United States rose by 0.6% for the month and by 3.7% for the year. The consensus forecast called for a monthly increase of 0.6% and an annual increase of 3.6%.

At the same time, these figures barely changed expectations regarding interest rates. According to the CME FedWatch tool, federal funds rate futures are pricing in at least one quarter-percentage-point rate hike by the end of the year, and the probability of this scenario has risen sharply over the past month.