U.S. stocks are holding up surprisingly well despite another violent move in the bond market, with the 10-year Treasury yield touching 5.34%, its highest level since 2002.
The yield later eased toward 5.27% as dip buyers returned, but the broader message remains difficult for equities: borrowing costs are rising sharply just as oil prices remain near $100 a barrel. Even so, U.S. equity futures stayed relatively steady, helped by strong AI demand and fresh earnings optimism from Micron. Reuters described the move as a case of stocks remaining resilient while global bond markets sold off. Reuters
The setup extends a pattern already visible in recent S&P 500 trading as AI strength offset bond pressure.
Micron Helps Keep the Nasdaq Supported
Technology remains the main source of resilience.
Micron disclosed $32 billion in financial commitments under long-term supply agreements, up from $22 billion in June, reinforcing the view that AI memory demand remains strong.
That follows Micron’s latest quarter, where revenue surged 379% as AI memory demand hit record levels.
The Nasdaq has therefore been able to absorb some of the pressure from higher yields, even though growth stocks are usually among the most sensitive to rising borrowing costs.
Bond Yields Are Still the Main Risk
The bond move is difficult to ignore.
The 10-year yield rose about 87 basis points during Q3, its biggest quarterly increase since 1994, while Britain’s 30-year yield moved above 6% and France’s 10-year approached 5%.
Higher yields raise financing costs across the economy and also make bonds more competitive with equities.
That pressure has already appeared repeatedly this month, including when oil and Treasury yields pushed the Dow, S&P 500 and Nasdaq lower.
Brent crude near $100 adds another complication because expensive energy can keep inflation elevated and delay any meaningful easing in interest rates.
Earnings Are Still Doing the Heavy Lifting
Corporate profits remain the strongest support for stocks.
S&P 500 earnings are now expected to rise about 35% in 2026, while the index itself is up roughly 12% this year. Analysts expect earnings growth to slow to around 15% in 2027, making future comparisons considerably harder.
The recent rally has also become increasingly dependent on earnings rather than multiple expansion, with the S&P 500’s forward P/E ratio falling to about 19.2 from 22 at the start of the year.
