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      US Services PMI Drives Bond Market Shift Amid Economic Concerns

      The US services sector showed unexpected strength in September, with the S&P Global flash services Purchasing Managers' Index (PMI) registering at 58.7, surpassing expectations of 56.0. This robust data contributed to a significant shift in the bond market, as US Treasury yields rose sharply, with the 10-year yield increasing by 14.5 basis points to 5.11%.

      In response to the economic indicators, the US Treasury conducted a sale of $70 billion in five-year notes, achieving a high yield of 5.033%. The market is now pricing in a 65% probability of a Federal Reserve interest rate hike in October, with concerns that the central bank may need to implement further increases to achieve its inflation target of 2%.

      The US dollar strengthened significantly, particularly against the Japanese yen, which rose by 92 pips to 158.27. This movement has raised speculation about potential intervention by Japanese authorities. Meanwhile, the equity markets faced pressure, with the S&P 500 declining by 0.8% and the Russell 2000 falling by 1.6%. Gold prices also dropped, falling by $71 to $4,283, as investors shifted towards higher-yielding assets.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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