Stocks Slide as Bond Yields Reach 19-Year High

Stocks are trading lower on Wednesday after US bond yields rose to their highest level in nearly two decades. The 10-year T-note yield jumped to a 19-year high of 5.04%. This increase in bond yields is pressuring stock markets, particularly those in the tech sector.

The S&P 500 Index and Nasdaq 100 Index are both down by more than 0.4% so far today, with chipmakers and AI-infrastructure stocks leading the decline. The iShares Semiconductor ETF (SOXX) has fallen over 1%, while Western Digital (WDC) and Seagate Technology Holdings Plc (STX) are down by more than 2%. Other notable decliners include Intel (INTC), Broadcom (AVGO), Advanced Micro Devices (AMD), and Analog Devices (ADI).

However, software stocks are bucking the trend, with Palantir Technologies (PLTR) leading gainers in both the S&P 500 and Nasdaq 100. Other notable gainers include Atlassian Corp (TEAM), Cadence Design Systems (CDNS), Datadog (DDOG), IBM (IBM), Microsoft (MSFT), ServiceNow (NOW), Thomson Reuters (TRI), Workday (WDAY), and Salesforce (CRM).

The rise in bond yields is being driven by a combination of factors, including higher crude oil prices and strong economic data. The US Sep S&P manufacturing PMI unexpectedly rose to a 4.25-year high, while the Eurozone's Sep S&P composite PMI also beat expectations.