Bond Yields Are Winning the Tug-of-War With Stocks Again

Stocks slipped Tuesday morning as bond yields extended their climb, with the 30-year Treasury yield touching a fresh multi-decade high and pulling the broader market lower even as tech names held up better than the rest. Volatility and oil prices have both climbed since the opening bell.

Intraday levels as of Tuesday morning trading.

Tech is the one bright spot

Technology was the exception to an otherwise soft session. The sector was up about 0.4%, and the iShares Semiconductor ETF (SOXX) jumped 1.9%, helping the Nasdaq hold nearly flat — down just 0.04% — while the Dow, S&P 500, and small-cap Russell 2000 fell more sharply.

A yield level not seen since 2002

The session had an early window of relief: bond yields eased in the first hour of trading, giving stocks some room to tick higher. That didn't last. The bond market's selling pressure resumed shortly after the open, and the 30-year yield climbed as high as 5.613% — its highest level since June 2002 — while the 10-year climbed to 5.27%. That's not just a multi-decade high in the recent run-up; it's a level the 30-year yield hasn't touched in more than 23 years.

Volatility and oil have both climbed since the open

Both the VIX and oil started Tuesday's session low and have been climbing steadily since the opening bell. The CBOE Volatility Index spent the early morning well below its recent average before turning higher, reaching 16.10 by mid-morning — still a moderate reading, but a clear shift from where the day started. Crude oil followed a similar path: after opening near $93.53 and sinking to as low as $90.13 in the first few hours of trading, it has been climbing back since, last near $91.57, though it remains down about 1.1% on the day.