Global stocks wobble between AI euphoria and 5% yields as October trading kicks off

On October 1, global equity markets started the fourth quarter on an uneasy footing as benchmark bond yields tested multi‑decade highs before easing back. The US 10‑year Treasury yield briefly touched around 5.35%, its highest level since 2002, before retreating toward the mid‑5.2% range. That late pullback helped the S&P 500 and Nasdaq Composite finish modestly higher, while the Dow Jones Industrial Average struggled for direction. The 10‑year yield is the key reference rate for mortgages and corporate borrowing costs, so swings there quickly filter through to risk sentiment.

The backdrop is a Federal Reserve that has seen some cooling in its preferred inflation gauge but is still expected to keep policy rates elevated for longer. That has kept pressure on global bonds for weeks. Even so, Big Tech and AI‑related names once again cushioned the blow: strong earnings from memory‑chip maker Micron and continued enthusiasm for the “AI trade” helped the Nasdaq hold in positive territory despite the rate shock.

Commodities added another layer of complexity. Oil futures climbed roughly 1%–4% depending on the contract, reviving worries that energy could reignite inflation. Gold futures, meanwhile, rose about 0.5% to around $4,205 an ounce, a modest rebound that suggests some investors are still willing to pay for portfolio insurance even in a high‑yield world. With AI‑driven equity gains colliding with 5%‑plus bond yields and sticky energy prices, the opening session of October underscored how finely balanced the global risk trade has become.