Treasury Yields Hold Above 5% as Oil and Bitcoin Prices Test Market Stability

The 10-year Treasury yield started the week at 5.283%, slightly down from a peak not seen since 2002. This follows weaker labor-market data, which showed nonfarm payrolls rising by just 29,000 in the latest month, well below expectations. The unemployment rate also rose to 4.2%. Despite this, the yield remains above 5%, supported by reports of increased U.S. military presence in the Middle East, which has pushed oil prices higher.

WTI crude oil traded near $91 after OPEC+ decided to keep November production targets unchanged. Brent crude ended last week above $102, marking a significant jump. Higher oil prices could exacerbate inflation pressures, complicating the Federal Reserve's policy outlook. Airlines, particularly Delta Air Lines, are feeling the impact, with earnings reports expected to reflect the strain of elevated fuel costs.

Bitcoin held steady above $86,000, despite the high Treasury yield offering investors a higher-yielding alternative. Demand for spot Bitcoin ETFs has remained strong, with significant inflows in recent months. Meanwhile, semiconductor stocks, led by Nvidia and Advanced Micro Devices, continue to outperform the broader market, helping to sustain the S&P 500 near record levels.

This week, investors will closely watch the Federal Reserve's minutes from its September meeting for clues on future interest rate moves. Key economic reports, including ISM services data, jobless claims, and consumer sentiment readings, could also influence market sentiment.