NEW YORK, September 3, 2026, 07:34 EDT — The benchmark 10-year U.S. Treasury yield hovered near 4.8%, increasing pressure on stock valuations as investors assessed the impact of higher government borrowing costs on equity markets.
- The 10-year Treasury par yield closed Wednesday at 4.79%, with the 30-year yield finishing at 5.27%.
- The yield on the 30-year note was 135 basis points higher than the three-month rate, maintaining high costs for long-term borrowing.
- Weaker private sector hiring now contrasts with inflation risks fueled by oil, adding complexity to the Federal Reserve’s decision in September.
The U.S. 10-year Treasury yield hovered close to 4.8% ahead of Thursday’s market open. This rate continues to place a significant discount rate on equities, mortgages, and corporate lending.
The main indication lies in the steepness of the curve. On Wednesday, the 30-year par yield reached 5.27%, compared to 3.92% for three-month securities. The resulting 135-basis-point difference reflects a significant premium for longer maturities.
The Treasury’s published curve showed the two-year yield at 4.39% and the 10-year yield at 4.79%. These numbers are based on indicative bids collected around 15:30 EDT, rather than on finalized transactions.
U.S. Treasury par yield curve
As of . Source: U.S. Treasury.
The decline extended across multiple maturities, with both five- and 10-year yields climbing six basis points since August 28. The yield on the 30-year increased by five basis points.
Yield change since August 28
Basis-point increase through September 2
Calculated from official August 28 and September 2 par yields. Source: U.S. Treasury.
The energy sector is adding to that strain. Brent crude neared $97 on Thursday morning, and U.S. crude rose above $92. The Associated Press linked the gains to fresh inflation fears over potential conflict involving Iran.
The jolt is felt across the yield curve. Michael Metcalfe, head of macro strategy at State Street, said that higher energy prices are fuelling expectations of rate increases. He called the bond selloff “orderly.”
Additional long-term premium is driven by debt supply. Reuters reported that substantial government borrowing and significant issuance from major technology firms were vying for investor funds. The yield on the 10-year closed close to its highest level since 2025.
Growth figures indicate a different trend. ADP reported an increase of only 38,000 private jobs in August, while economists surveyed by Reuters had forecast 48,000.
The next tests for Treasury pricing
Scheduled U.S. releases, Eastern Daylight Time
Sources: New York Fed calendar and Bureau of Labor Statistics.
Reuters reported that traders continued to assign roughly a 70% probability to a September Fed hike. Upcoming data at 08:30 on Thursday, along with the 10:00 services report, could rapidly alter those odds.
Therefore, the key investor test is not just if yields increase. It is whether soft job growth drives short-term rates down, while elevated supply and inflation keep long-term yields up. This scenario would further steepen the yield curve.
Assets with longer durations are most sensitive. With Treasury benchmarks close to 5%, the required return for distant cash flows rises. Government bonds also become stronger rivals to equities for capital.
Risks: A sustained drop in oil prices or disappointing payroll data could halt the market selloff. Conversely, robust services prices, increased issuance, or new supply disruptions may send the 10-year yield above 5%.
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