Market Indexes Fall Again as the 30-Year Yield Hits a 2004 High

Stocks fell for a second straight session Thursday as Treasury yields pushed to multidecade highs and crude oil climbed again. Meanwhile, a data center setback for Oracle (NYSE: ORCL) weighed on technology shares.

The Nasdaq Composite (NASDAQINDEX: ^IXIC) dropped 0.8% as of 11:25 a.m. ET, the Dow Jones Industrial Average (DJINDICES: ^DJI) fell 0.6%, and the S&P 500 (SNPINDEX: ^GSPC) took a 0.5% hit. Eighteen of the Dow's 30 components traded lower.

^SPX data by YCharts

Yields went up, so stocks went down

The drooping chart lines start in the bond market. The 30-year Treasury yield touched 5.446%, its lowest level since June 2004, while the 10-year hit 5.15%, matching a July 2007 high. The FedWatch odds of an October rate hike are now 71%, against roughly 55% a week ago. Mortgage rates soared to a multi-year high of 7.1%.

That's a lot of economy drama for an ordinary Thursday. But there are real catalysts behind the moves.

An advisor to Iran's supreme leader warned that Iran and its Houthi allies could open a new front against Red Sea energy supplies. Adding another choke point besides the Strait of Hormuz pinch would wreak havoc on the supply and-demand economics of global oil shipments. A commercial ship was hit in the Strait on Wednesday, and one Indian crew member died. Under these circumstances, this morning's 1% jump in oil prices almost feels calm.

Diesel is turning into a political problem. It averaged $6.51 per gallon on Thursday, $2.82 above last year, and President Donald Trump said this week he's been advocating for an export ban within his own administration. The Chamber of Commerce, Business Roundtable, National Association of Manufacturers, and American Petroleum Institute all signed a letter telling him that it would backfire by cutting production and raising prices.

The Dow's drop came down to two names. Goldman Sachs (NYSE: GS) fell 2.2% and took out 119 points, and Caterpillar (NYSE: CAT) dropped 2.1% for another 100. That's 219 points from two stocks, neither of which announced anything. Heavy index weight plus economic pressure equals significant Dow changes.

Then there's Oracle, down more than 5% and leading the Nasdaq lower. The database giant declared "force majeure" on Project Jupiter, a $165 billion data center in New Mexico, due to power supply difficulties. The center requires 2.45 gigawatts of power, and the 17-mile gas pipeline that was supposed to feed it can't get the environmental permits it needs. So the construction schedule slipped, moving the ribbon-cutting from August 2026 to February 2027.

Meta Platforms (NASDAQ: META) had the opposite kind of day, up 3.1% as analysts raced to raise price targets on the stock. Meta's Muse AI agent drove the bullish report rush, as analysts see multi-billion-dollar value in its shopping-assistance functions.

What Trump and Xi actually agreed on

Wall Street has been waiting for today's Xi-Trump summit all week. The results were mixed.

The U.S. and China extended their trade truce by two months past its Nov. 10 expiration. That's shorter than anyone expected, and China wanted it to stretch into 2029. The leaders also discussed establishing a notification system for AI incidents that could affect national security. Trump sees "a truly great friendship" emerging between the world's two largest economies, while Xi Jinping focuses on continued dialogue over many issues of global concern.

That's two consecutive down days, bond yields at generational highs, and a truce extension measured in weeks. October is going to be busy.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Caterpillar, Goldman Sachs Group, Meta Platforms, and Oracle. The Motley Fool has a disclosure policy.