10-Year Back Above 5%: Chips Fall, Software Rallies
Yields — the 10-year is back above 5% on a hot PMI and a hawkish Fed; chips fall, software is bought
The ten-year reached 5.064%, up nearly ten basis points, after the flash PMI showed the fastest US output growth in more than five years and Governor Barr said further rate increases are likely needed. The Nasdaq is down 0.81% after two record closes, SOXX 1.40% and the memory basket 1.93%, while IGV is up 1.30% and the cyber fund at a new high. Oil is up again, bitcoin and gold are down.
In this edition
The Midday 10 Wed, Sep 23, 2026 ~60 seconds 12:30 ET
The number that is running this market this morning is the ten-year Treasury yield. It closed Tuesday at 4.968%; at 11:25 in New York it was 5.064%, back above the level that has framed the whole month. The long-bond fund TLT is down 1.29%. Three things put it there: a flash PMI that showed US output growing at the fastest pace in more than five years, Fed Governor Michael Barr saying further rate increases are likely to be needed, and oil rising again after five straight declines.
The stock market read it the way it reads every rate shock. The Nasdaq Composite, after two record closes, is down 0.81% at 27,022.58, the S&P 500 0.47% and the Russell 2000 1.16%. Semiconductors - the longest-duration trade in the market and the biggest winners of the last two weeks - are sold: SOXX down 1.40%, the memory basket 1.93%, SanDisk 2.37%. Software, already de-rated, is bought: IGV up 1.30%, Salesforce 2.11%, and the cybersecurity fund at a new 52-week high.
That is a reversal of Tuesday's sort, when memory led and software was sold. It says the rate clock is louder than the agent clock today. Meta is the exception among the mega-caps, up 2.59% ahead of tonight's Connect keynote; bitcoin is down 1.85% and gold 1.67%, and Europe closed weaker except for oil-heavy London.
US intraday quotes at about 11:25 ET (15:25 UTC), the last five-minute bar; moves are measured against Tuesday's closes. Intraday prints are not closes. Europe is shown in the last minutes of its session; Seoul and Taipei are today's closes. Oil moves are the Brent and WTI funds (BNO, USO); the Brent price level is as reported. The flash PMI, Governor Barr's remarks and Cintas's results are taken from the published releases and wire reports. AMD's market value uses 1,632,475,042 shares.
- Ten-year 5.064%, up nearly 10bp from Tuesday's 4.968% close, TLT -1.29%: flash composite PMI 58.4 (August 56.0), services 58.7 against 56.0 expected; Governor Barr says further rate increases are likely needed and the Fed was 'out of position'
- Nasdaq Composite 27,022.58 (-0.81%) after two record closes, Nasdaq 100 30,518.62 (-0.70%), S&P 500 7,727.88 (-0.47%), Dow 51,666.75 (-0.38%), Russell 2000 2,856.31 (-1.16%) the weakest
- Chips sold as duration: SOXX 564.77 (-1.40%), SMH (-1.09%), memory basket (-1.93%); SanDisk $1,842.32 (-2.37%), Intel (-2.24%), Broadcom (-2.13%), Micron $1,080.64 (-1.42%), Nvidia $225.64 (-1.41%), AMD $615.00 (-1.41%, about $1.00 trillion), Arm (-1.36%); Applied Materials flat
- Software bought: IGV 108.14 (+1.30%), Salesforce $238.21 (+2.11%), ServiceNow (+1.60%), Adobe $240.57 (+0.97%), Microsoft $498.69 (+0.14%, high $507.79); the cyber fund CIBR 103.90 (+1.29%) above Tuesday's 103.66 intraday high - a new 52-week high; Intuit (-1.00%) the exception
- Meta $755.68 (+2.59%, high $760.49) into tonight's Connect keynote at 23:00 UTC; against Alphabet $341.33 (-2.80%), Amazon $250.50 (-1.76%), Apple $336.88 (-0.84%); MAGS -0.29%
- Oil turns after five down days: the Brent fund BNO $59.61 (+2.94%), the WTI fund USO (+2.45%), energy stocks XLE (+1.37%); Brent reported back above $101 a barrel
- VIX 14.56 (+2.5%), dollar 158.29 yen (+0.62%), bitcoin $84,598 (-1.85%), the gold fund GLD $393.38 (-1.67%)
- Cintas beat and raised, the stock is lower: fiscal first-quarter revenue $3.01 billion (+10.9%, organic +8.9%), EPS $1.36 ($1.39 adjusted) against $1.36 expected; full-year revenue guide raised to $12.15-12.27 billion and adjusted EPS to $5.45-5.54; shares $197.75 (-0.53%)
- Europe weak into the close except London: Euro Stoxx 50 6,305.56 (-0.30%), DAX 25,430.41 (-0.58%), CAC 8,130.60 (-0.30%), FTSE 100 10,718.38 (+0.09%); Seoul closed +0.90% at 7,080.92 before Chuseok, Taipei +0.92% at 48,157.29, Hong Kong -0.83%
- Tonight Meta Connect at 23:00 UTC; Thursday Tokyo reopens after three days with a ten-year above 5% and the yen past 158, Seoul closes for Chuseok, Trump-Xi meet, BlackBerry and Costco report; chart pick scores Friday; Micron on 30 September
The ten lines
- 1
LEVEL Ten-year 5.064%, up nearly 10bp from Tuesday's 4.968% close, TLT -1.29%: flash composite PMI 58.4 (August 56.0), services 58.7 against 56.0 expected; Governor Barr says further rate increases are likely needed and the Fed was 'out of position'
TLTSPYIWMXLF
The S&P Global flash survey showed US output growing at the fastest pace in more than five years and new orders at the fastest in nearly four and a half; backlogs rose at the fastest rate since May 2022 despite the strongest hiring in more than four years. An hour later Governor Michael Barr said in Chicago that further policy adjustments are likely to be needed to bring inflation to target in a timely fashion. A strong economy and a central banker who says the job is not done is the combination that lifts yields, and it did: the ten-year is back above 5% one week after the Fed's last increase.
- 2
DOWN Nasdaq Composite 27,022.58 (-0.81%) after two record closes, Nasdaq 100 30,518.62 (-0.70%), S&P 500 7,727.88 (-0.47%), Dow 51,666.75 (-0.38%), Russell 2000 2,856.31 (-1.16%) the weakest
QQQSPYDIAIWM
This morning's Morning 10 was written from flat overnight futures - S&P +0.08% at 05:40 UTC - and the session turned lower once the rate news landed. The shape of the decline is the tell: the Russell 2000, full of companies that borrow at floating rates, is down the most, and the equal-weight S&P is down less than the cap-weighted index. That is a rate day, not a growth scare. The Composite is still less than 1% below Tuesday's record close of 27,244.28.
- Sector Engine Eleven sectors by four regions — the global rotation matrix Bloomberg keeps for institutions. Open the matrix →
- 3
DOWN Chips sold as duration: SOXX 564.77 (-1.40%), SMH (-1.09%), memory basket (-1.93%); SanDisk $1,842.32 (-2.37%), Intel (-2.24%), Broadcom (-2.13%), Micron $1,080.64 (-1.42%), Nvidia $225.64 (-1.41%), AMD $615.00 (-1.41%, about $1.00 trillion), Arm (-1.36%); Applied Materials flat
SOXXSMHDRAMSNDKMUAVGOINTCNVDAAMD
Memory's lead - SanDisk up 6.82% on Tuesday alone - left the group with the most profit to take and the most future in its price, which is exactly what a rising discount rate marks down first. Nothing in the morning's news was about chip demand. AMD is still above the $612.57 line that makes it a trillion-dollar company, at about $1.004 trillion. Micron reports on 30 September; that is where demand, rather than the price of money, gets tested.
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Ten lines on the US midday tape, not advice — an investment diary. Published every trading day at 12:30 ET. See The Morning 10 and the Daily Pulse.