U.S. Treasury yields edged lower early Thursday, offering some relief to risk assets after a steep bond-market sell-off sent borrowing costs sharply higher the previous day.
The 10-year Treasury yield dropped 2.4 basis points to 5.092%, while the two-year yield declined 3.9 basis points to 4.856%.
The move lower in yields helped markets recover from earlier losses. The Nasdaq reduced a decline of more than 1% to about 0.5%, while bitcoin rose to $84,300 after falling to around $83,000 earlier in the session.
New Home Sales Exceed Estimates
U.S. new home sales climbed to a seasonally adjusted annualized pace of 684,000 in August, compared with 643,000 in July, Census Bureau data showed.
The result was above economists’ expectations for a decline to 620,000. The figures are preliminary and can undergo substantial revisions.
Barkin Cites Persistent Inflation Risks
Richmond Fed President Tom Barkin said the central bank’s decision to raise interest rates last week reflected concerns that inflationary shocks may be proving more persistent.
“New tariffs are still cropping up,” Barkin said, adding that the ongoing Middle East conflict and continued AI-related investment were also putting pressure on supply chains.
Barkin stopped short of endorsing another rate increase. He said inflation could ease rapidly if some of the recent shocks reverse, consumer spending reaches its limits, investment slows, markets correct or employment weakens enough to create new concerns for the labor market.
Oracle Seeks Payment Delay
Oracle (ORCL) has sent a force majeure notice to the developer of Blue Owl Capital’s Project Jupiter data center in New Mexico, Bloomberg reported.
The clause can allow contractual obligations to be delayed or suspended when circumstances outside a party’s control disrupt a project. Oracle is seeking to defer payments if the facility does not open as planned in 2028, although whether the provision applies remains uncertain.
Blue Owl (OWL) shares declined 2.3% in premarket trading, Bloom Energy (BE) fell 4.4% and Oracle dropped 4.2%.
Jobless Claims Stay Below 200,000
Initial U.S. jobless claims remained near historically low levels, providing another indication that labor-market conditions remain strong.
Claims totaled 197,000 last week, little changed from 196,000 previously and below the 201,000 economists had anticipated.
Treasury Market Volatility Surges
Volatility in the Treasury market increased sharply as government bond yields reached their highest levels in years.
The MOVE index, a gauge of expected Treasury volatility, rose 21% to above 95, its highest reading since April.
The 10-year yield touched 5.116%, the highest level since 2007, while the 30-year yield climbed to 5.419%, its highest since 2004.
Gundlach Points to Fed’s Dilemma
DoubleLine Capital founder Jeff Gundlach said the Federal Reserve faces competing risks in deciding its next policy move.
He argued that another rate increase could intensify the government’s interest expense burden because significant borrowing is concentrated at the short end of the yield curve. Conversely, cutting rates could add to inflationary pressure.
Crypto and Equities Remain Weaker
Bitcoin traded around $83,500 ahead of Thursday’s U.S. market open, down 2.55% over the previous 24 hours. Ether and Solana were each down about 3%, while XRP declined 7.5%.
Stock futures also pointed to another weak session, with Nasdaq futures down 0.9% and S&P 500 futures off 0.5%.
The Treasury market stabilized early Thursday after Wednesday’s sell-off drove the 10-year yield almost 20 basis points higher, taking it to its highest level in more than 19 years.
Investors are now awaiting the latest initial jobless claims data, August new home sales figures and comments from Federal Reserve officials.
