October kicked off with a familiar refrain, echoing the turbulence that characterized September. Once again, the persistent surge in Treasury yields takes center stage, creating an atmosphere of uncertainty and unease among traders.

The 10-year Treasury yield has surged to 4.70%, while the 30-year yield has breached the 4.80% threshold, both up by 10 basis points on the day. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) plummeted by nearly 2% as of midday trading in New York, hitting the lows from August 2007.

In parallel, Federal Reserve Chair Jerome Powell engaged with Philadelphia Fed President Patrick Harker in discussions with various stakeholders, including workers, small business owners, and community leaders in Pennsylvania.

Powell acknowledged that the U.S. economy is still grappling with the repercussions of the COVID-19 pandemic, highlighting ongoing challenges such as labor shortages in healthcare, ongoing childcare accessibility issues, and other residual effects of the health crisis. Notably, Powell refrained from commenting on current monetary policy or the economic outlook.

Earlier Monday, positive data emerged from September’s manufacturing activity, as indicated by the ISM PMI and S&P Global’s PMI. This data bolstered the U.S. dollar and led to a surge in rate-hike expectations, reaffirming the resilience of the U.S. economy. Traders are currently assigning a 30% probability of a rate hike during the upcoming November meeting, with the likelihood increasing to 45% for a rate hike by the December meeting.

Cues From Monday’s Trading: Utilities Nosedive, Tech Outperforms

In the stock market, major indices are predominantly in the red, with the notable exception of the tech-heavy Nasdaq 100, up 0.2%

The S&P 500 index fell 0.7%, while blue-chip stocks in the Dow Jones tumbled 0.8%. Small caps in the Russell 2000 index plummeted 1.6%.

US Index Performance On Monday

Monday’s Trading In Major US Equity ETFs

Looking at S&P 500’s sector ETFs:

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Crude oil fell 1.5%, with a barrel of WTI-grade crude trading at $88.50. The United States Oil Fund ETF (NYSE:USO) was 1.2% lower to $79.87.  

The dollar slightly rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), up 0.7%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), tumbled 0.7% to 1.0495.

European equity indices closed in the red. The SPDR DJ Euro STOXX 50 ETF  (NYSE:FEZ) was 1.8% lower.

Gold tumbled 0.8% to $1,832/oz, while silver fell 4.3% to $21.22. Bitcoin (CRYPTO: BTC) edged 0.2% lower to $27,929.

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