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Morning Edition · Monday, October 5, 2026Published at 1:06 AM EDT · New York
Treasury Yields Hold Near 24-Year Highs After Weak Jobs Data, While the Nikkei Climbs Back Above 70,000
US employers added only 29,000 jobs in September, and bets on an October Federal Reserve rate increase fell. The 10-year yield remains above 5.1%, but gold has not risen to match.
The 10-year US Treasury yield rose above 5.34% early on October 1, the highest level since April 2002, according to The Hill. The 30-year yield reached 5.67%. Analysts cited fuel-driven inflation and a federal debt that passed $40 trillion in August. In its weekly summary, the Israeli business daily Globes described yields jumping to a 24-year high, while the Nasdaq trades at a record.
Labor data released on Friday changed the expected rate path but did little to lower long-term yields. The Labor Department reported 29,000 new nonfarm jobs in September against an expected 84,000, and unemployment rose to 4.2%. After the report, the 10-year yield fell about 6 basis points to 5.18%. Futures markets moved to price an 84% chance that the Federal Reserve leaves rates unchanged this month. Investing.com reported on Monday that stocks were higher and the dollar gained against the euro as bets on a rate increase fell.
Asian stocks also rose on Monday. Japan's Nikkei 225 rose about 2.5% to above 70,000 in morning trading, and Nikkei Asia attributed the gain to renewed optimism about artificial intelligence (AI) stocks. Sources describe the level differently. Nikkei Asia says the index regained 70,000 for the first time in three months. Globes reported that it crossed 70,000 "for the first time" and noted thin volumes because of holidays in China and South Korea. A Japanese executive cautioned against the rally. The head of Mitsubishi Corp, a large Japanese trading house, told the Financial Times that the market's bull run is at risk if bond yields keep rising, and that Japanese companies must deploy their cash more efficiently.
Precious metals have not moved as far as bonds. Gold traded at about $4,144 an ounce on Monday, up 0.08%, according to Trading Economics. Silver traded near $61, up about 1.7%. Nominal, or unadjusted for inflation, 10-year yields above 5% raise the cost of holding gold, which pays no interest. That cost partly explains why gold has not risen with fiscal stress.
Part of a tracked trend
The Long-End Revolt
Governments will keep reaching for balance-sheet tools to suppress long-term yields, and bond markets will keep repricing duration higher anyway, so each intervention transfers demand into scarce assets instead of lowering borrowing costs.
What this means
This is the pattern the desk's "long-end revolt" thesis predicts: short-term rate expectations fall on weak data while long-term yields stay near 24-year highs. In that pattern, investors demand a higher premium for holding long-dated debt to compensate for fiscal and inflation risk, regardless of what the Federal Reserve does next. Exposure is highest in mortgage-rate-sensitive housing, credit-financed AI construction, and the richly valued equity indexes in Tokyo and New York, which the Mitsubishi chief described as vulnerable to bond yields. The consensus reads weak payrolls as relief, but stagnant hiring alongside 5% long-term rates is stagflation, not easing. A precedent exists. In October 2023, the 10-year yield approached 5% and fell back only after the Treasury moved new borrowing toward short-term bills at its November refunding. The likelier outcome within one to three months is a similar balance-sheet response, either more short-dated issuance or official comments about buybacks. That response would hold the 10-year yield in the low 5% range but would not lower it much. A clear drop in oil and core inflation would prove this read wrong by letting yields fall on their own. Gold stays flat until inflation-adjusted yields start to fall, then responds sharply.
What to watch
- The Treasury's next quarterly refunding announcement, which sets the size and terms of new debt sales. A shift toward short-term bills would confirm that officials are managing the long end through issuance rather than letting the market set it.
- Whether the 30-year yield sets a new high this week despite weaker jobs data. A new high would show that investors are pricing fiscal risk, not just the Federal Reserve's next rate move.
- Japanese government bond yields after a session thinned by holidays. Rising yields at home would test the Mitsubishi chief's warning about Japanese stock valuations.
Observations to monitor, not financial advice.
Synthesized from: Globes (Hebrew) · Nikkei Asia · Financial Times Markets · Investing.com Economy
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