US 10-Year Yield Slips Below 5% in Biggest Drop Since 2025 as Wall Street's Tech Sell-Off Deepens

The US bond market sent an unusual signal on Thursday. Even as oil climbed to its highest level since May, investors poured money into Treasuries, pushing the benchmark 10-year yield back below 5 per cent in what was on course to be its largest one-day fall since August 2025.

By early afternoon in New York, the 10-year yield was down roughly 12 to 18 basis points, trading in a 4.96 to 4.99 per cent range depending on the time of the snapshot, its lowest level in nearly a month. If it holds into the close, it would be the first finish below 5 per cent since late September. The 30-year yield also fell about 10 basis points to around 5.32 per cent.

A flight out of AI, not out of stocks

The rally in bonds was mirrored by a sharp, narrow sell-off in equities. Around midday, the S&P 500 was down about 1.2 per cent and the Nasdaq Composite between 2.1 and 2.4 per cent, while the Dow Jones Industrial Average was almost flat. That gap points to investors pulling money out of high-valuation technology names rather than leaving the stock market altogether.

Meta Platforms was the biggest single drag, falling about 7 per cent. Its third-quarter results came with a higher 2026 capital spending forecast of $135 billion to $145 billion and a quarter of negative free cash flow, reviving questions about when the AI build-out will start paying for itself. The company also announced a new class of non-voting shares through a 2-for-1 split. Tesla swung around after beating earnings estimates, trading about 2 per cent lower as investors weighed lighter spending this year against heavier outlays planned for 2027 and 2028.

Chipmakers were hit harder still. Lam Research fell around 9 per cent after its results, Applied Materials and KLA lost about 6 per cent, and a widely tracked semiconductor ETF dropped roughly 4 per cent, breaking below a low it had bounced from just two sessions earlier.

Oil up, inflation fears muted

What makes the Treasury move stand out is the backdrop. Brent crude rose more than 3 per cent to about $112 a barrel and US crude neared $100, after a New York Times report that Washington and Israel have drawn up plans for renewed strikes on Iran after the November 3 midterm elections. Deadly Houthi attacks on a Saudi airport and oil field added to the pressure.

Normally, an oil spike of that size would push yields higher on inflation worries. Instead, bond traders appear to be betting that slower AI investment and tighter policy will cap price pressures. Market-implied inflation expectations have barely moved since the Iran war began in late February, even with Brent up more than 50 per cent over that period.

Other risk assets also retreated. Bitcoin fell below $82,000, and gold slipped about 2 per cent to near $4,060 an ounce. One bright spot was the US labour market: weekly jobless claims fell to 194,000, the fewest in three months.

The France twist

The day also brought a symbolic moment in global bond markets. Earlier in the session, France's 10-year borrowing cost briefly rose above the US equivalent for the first time since 2013, at around 5.09 per cent, as Paris struggles to pass next year's budget amid unrest. The crossover was short-lived because US yields kept falling, but it shows how investors now view French public finances.

Why it matters for India

Indian markets had already felt the first wave of this AI-driven selling in Asian trade on Thursday. The US session's close will shape Friday's open in Mumbai, which is also the day Infosys is due to report its September-quarter results. Lower US yields usually help emerging-market currencies and foreign inflows, but crude above $110 remains the bigger risk for India's import bill and the rupee.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.