Why are Treasury yields rising? The 10-year hit 5.35% on October 7, 2026, its highest since 2002

The 10-year US Treasury yield rose nearly 8 basis points to 5.35% on Wednesday, October 7, 2026, its highest level since 2002, and the 30-year yield climbed to 5.70%, also the highest since 2002. Bond investors were selling over inflation risk from higher energy prices, and the day carried two tests for the market: a $39 billion auction of new 10-year notes and the release of minutes from the Federal Reserve's September policy meeting. US stocks opened lower: a report that Wall Street had opened down as yields and oil rose reached the MoveSurge news feed at 09:33:28 ET, and the S&P 500 contract we track fell from 7,792.4 to 7,775.1 over the next fifteen minutes, a 0.22% drop.

Treasury, gilt and mortgage rates in October 2026

Why Treasury yields are rising

A bond's yield rises when its price falls, and prices have been falling because investors want more compensation to lend for ten or thirty years while energy prices keep inflation risk high. When oil climbs, the market expects inflation to stay above the Fed's target for longer, which lowers the real value of a fixed coupon and keeps the Fed from easing. The longer the maturity, the more a bond loses when inflation expectations rise, so the 30-year yield has climbed alongside the 10-year.

Supply adds to the pressure: the Treasury sells new notes and bonds every month to fund the deficit, and each auction has to clear at a yield buyers accept. Wednesday's $39 billion 10-year sale was watched for a "tail": an auction that clears above the yield the notes were trading at just before the bidding closes signals weak demand, and the higher yield then carries over into the rest of the market.

The selloff is global

Britain's 30-year gilt yield moved above 6% on October 1 for the first time since 1998, touching 6.029%. The pressure there has come from energy-driven inflation, expectations of tighter Bank of England policy, heavy gilt issuance and uncertainty ahead of the government's October 28 budget. Higher yields in one large bond market pull others up with them, because global investors compare returns across government debt; the US 10-year set its own 2002-era high of 5.34% on the same day.

How the move built over the past week

1. October 1, 2026: the UK 30-year gilt yield crosses 6% for the first time since 1998, and the US 10-year reaches 5.34%, its highest since 2002. Freddie Mac's 30-year mortgage average rises to 7.28%.
2. October 5, 2026: the 10-year yield sets another 2002-era high at the start of the week.
3. October 6, 2026: yields ease from their highs as the surge cools.
4. October 7, 2026: the 10-year rises to 5.35% and the 30-year to 5.70% before the 10-year note auction and the Fed minutes.

What higher yields mean for mortgages and stocks

Lenders price the 30-year fixed mortgage off the 10-year Treasury yield plus a spread, so the bond move passes through to home loans within days. Freddie Mac's weekly average rose to 7.28% in the week to October 1 from 7.03% a week earlier, its highest level since November 2023 and almost a full percentage point above the 6.34% of a year earlier.

For stocks, a higher risk-free yield raises the return investors demand from equities, which lowers the present value of profits expected far in the future. Growth companies, whose value rests most on distant earnings, tend to feel that first. Wednesday's open followed that pattern: the S&P 500 contract we track was 0.05% lower a minute after the 09:33:28 ET report of a weaker open and 0.22% lower fifteen minutes later.