Most US stocks fall after the bond market cranks the pressure higher
[October 01, 2026] By
STAN CHOE
NEW YORK (AP) — Most of the U.S. stock market fell Wednesday as Wall
Street contended with the downside of a U.S. economy that keeps powering
through its many challenges.
The S&P 500 slipped 0.3% to close out its third losing month in the last
four. The Dow Jones Industrial Average dropped 443 points, or 0.9%, and
the Nasdaq composite added 0.2%.
Stocks turned lower after data reports suggested the U.S. economy was
even stronger during the spring than earlier thought. That helped yields
remain high in the bond market, which in turn kept up the pressure
weighing on stocks and all financial markets.
The day began with gains for stocks following an encouraging report that
said inflation wasn’t as bad across the United States last month as
economists expected. It said the cost of living for U.S. consumers was
3.4% higher overall in August than a year earlier. That was not as high
as the 3.7% inflation rate that economists expected, even if it remained
worse than the Fed’s 2% target.
The report followed others from earlier in the month about inflation
during August, but it’s the one that the Federal Reserve prefers to use.
Shorter-term Treasury yields fell as traders pared bets that the Fed
will raise its main interest rate next month to get inflation further
under control. They now see just a 37% chance of that, down from the
coin flip’s chance seen a day earlier, according to data from CME Group.
That helped the yield on the two-year Treasury briefly fall toward 4.83%
before it pulled back to 4.89%, where it was late Tuesday.
But longer-term yields rose in the bond market. That’s in part because
worries about high inflation are just one of the reasons longer-term
yields have jumped in the United States and around the world.
The seemingly solid U.S. economy is another. Besides Wednesday's
better-than-expected report on the overall U.S. economy, another update
said growth in business activity in the Midwest was also stronger than
economists expected.
Much of the strength in the U.S. economy is due to consumers, who are
increasing their spending by more than their incomes are rising.
“The consumer remains resilient, in a much better position than
previously thought,” according to Gary Schlossberg, global strategist at
Wells Fargo Investment Institute.
Other factors sending Treasury yields higher are also continuing to
churn, including worries about the big debt loads that Washington and
other governments worldwide are supporting.
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 Oil prices, meanwhile, rose in their
latest swings amid uncertainty about when the war with Iran will
allow the flow of crude to be fully restored. Brent crude, the
international standard, climbed 1.9% to settle at $98.03 per barrel.
It all helped the yield on the 10-year Treasury, which is the
centerpiece of the bond market, drop as low as 5.20% in the morning
before rising to 5.29%. That’s up from 5.26% late Tuesday, and it’s
back to where it was more than two decades ago in 2002.
The 30-year Treasury yield, which takes into account expectations
for inflation and economic growth many years down the line, climbed
to 5.64% from 5.59% late Tuesday.
Higher yields slow the overall economy by making borrowing money
more expensive for everyone, while undercutting prices for all kinds
of investments.
On Wall Street, Cal-Maine Foods dropped 0.7% after the country’s
largest egg company reported a larger loss for the latest quarter
than analysts expected. With plenty of eggs available in the market,
Cal-Maine Foods saw a sharp drop in prices it could charge, compared
with a year earlier.
Helping to limit the market's losses was Hewlett Packard Enterprise,
which rose 3.9%. It increased its forecast for revenue from its
networking business, which is benefiting from the boom in
artificial-intelligence technology.
MongoDB climbed 3.4% after the database company’s board boosted its
program to send cash to shareholders by $1 billion through buybacks
of its own stock. That helped MongoDB recover some of its sharp loss
from earlier in the week, after it said Chirantan “CJ” Desai was
stepping down as CEO for a senior role at Meta Platforms.
All told, the S&P 500 fell 19.30 points to 7,651.54. The Dow Jones
Industrial Average dropped 443.87 to 50,906.05, and the Nasdaq
composite added 63.52 to 26,861.06.
In stock markets abroad, indexes dipped in Europe following a mixed
finish in Asia. Japan’s Nikkei 225 jumped 1.9%, while France’s CAC
40 fell 0.9% for two of the world’s bigger moves.
___
AP Business Writers Yuri Kageyama and Michelle Chapman contributed
to this report.
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