U.S. equity markets retreated from recent highs, with the S&P 500 dropping 0.2 percent to 7,802 and the Nasdaq Composite falling 0.2 percent to 27,539. The Dow Jones Industrial Average declined 0.7 percent to 51,180.
Treasury yields climbed sharply across the curve. The benchmark ten-year yield rose seven basis points to 4.63 percent, while the two-year yield increased five basis points to 5.01 percent. This move reflected market participants pricing out near-term rate cuts after stronger-than-expected economic data suggested persistent inflation. Fed funds futures now show a 65 percent probability of no rate cut at the next two Federal Open Market Committee meetings, up from 50 percent one week ago.
The higher yield environment lengthened duration risk for bond portfolios, particularly for growth-oriented technology stocks sensitive to borrowing cost increases. Meta Platforms dropped 2.4 percent to 721.31, while Nvidia fell 0.7 percent to 237.47 and Tesla declined 0.8 percent to 377.81. The Russell 2000 index, tracking smaller companies, fell 1.3 percent to 2,793.
The yield curve showed slight steepening, with the spread between short and long-term rates widening modestly. Investors will watch the Consumer Price Index report scheduled for November 12 for further clarity on the Federal Reserve's policy path.
