Treasury Yields Soar Above 5% as Fed Rate Hike Odds Exceed 60%

The US Treasury yield has broken above the 5% threshold, and interest rate futures now price in a greater than 60% probability that the Federal Reserve will hike rates again at its October meeting.

This week's market focus centers on two major macroeconomic data points: the Fed's core PCE price index and the September nonfarm payrolls report. The previous reading showed core PCE inflation at 3.3% year-over-year through July, still well above the Fed's 2% target.

Market participants note that the concentration of gains in a handful of mega-cap tech names is becoming increasingly evident, with eight out of eleven sectors declining so far in September. Paul Nolte, market strategist at Murphy & Sylvest Wealth Management, said: 'The major indices are holding up well, but the average stock is not.'