Stocks at Records, Bonds at 2002 Levels: Wall Street’s Odd Couple

United States. The S&P 500 closed the week to 9 October at 7,811.51, up 0.95% on the week, after setting an all-time high on Tuesday. The Dow finished at 51,655.01. That would be unremarkable if the bond market agreed. It does not. On 7 October the 10-year Treasury yield rose above 5.35%, its highest since 2002, and the 30-year reached 5.70%, according to Forbes. By Friday afternoon the 10-year still stood near 5.25%.

## Why yields keep climbing
The Federal Reserve raised its target range by a quarter point to 3.75%–4% on 16 September, a unanimous vote the statement tied to persistent pressure in energy and consumer prices. With Brent settling at $104.72 on Friday, the market expects more: CME FedWatch pricing, cited by Forbes on 29 September, points to another hike on 28 October or, failing that, in December. Add a CBO-projected $1.9 trillion deficit and what Goldman Sachs estimates is $489 billion of AI-related bond supply this year, and the term premium has room to run.

## What is being watched
- 13 October: the big banks open earnings season. Delta has already cut its 2026 adjusted EPS outlook to $5.10–$5.60.
- 14 October: September CPI, which will shape whether the Fed can pause.
- Sentiment: the University of Michigan’s preliminary October reading fell to 46.3.

The case for equities rests on earnings and the AI build-out holding up. The risk is arithmetic. With the 10-year TIPS yield at 2.94%, per Forbes, bonds now offer a real return that competes with stocks priced for very little going wrong. UBS argues today’s 5.3% yield reflects a different regime from 2002, which is not the same as saying it will fall.

Sources: TheStreet, Forbes, Raisin, The Columbian (AP), Nation Thailand (Reuters). This is information, not investment advice.