Bond yields spike and stocks drop — plus, why Boeing is bucking the trend
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Stocks dropped Wednesday as bond yields spiked in reaction to strong economic data. The 10-year Treasury yield jumped to a new 19-year high above 5.12%. The bond selloff, which drove yields higher due to their inverse relationship, accelerated after a much stronger-than-expected S & P Global US Flash PMI report. The manufacturing purchasing managers index increased to 57 in September from 53.9 in August, marking its greatest improvement in manufacturing business conditions since May 2022. The report also showed that price pressures intensified in September, with average input costs across both goods and services surging. The market viewed the good economic data as bad news because it gives the Federal Reserve more cover to raise interest rates to temper growth and stamp out stubborn inflation. According to the CME FedWatch tool , there’s now a 57% probability that the Fed raises rates by 25 basis points at each of its final two meetings of 2026, which will be held next month and in December. That probability is up from 38% just one week ago. The S & P 500 dropped nearly 1%, while the Nasdaq fell more than 1%. Only two market sectors — energy and industrials — were in the green. Energy was the strongest on the day, on a rise in oil prices after five sessions of declines. President Donald Trump said that U.S. officials had a “very good meeting” at the United Nations on Tuesday with Iran’s delegation. Nothing concrete was announced on a lasting peace or a full reopening of the Strait of Hormuz, where up to 25% of the world’s oil supply passed through before the U.S.-Iran war. Boeing shares rose more than 1.5% after the union representing Boeing ‘s engineers and technical employees recommended that its members accept the company’s latest contract offer. This is a positive signal and an important step forward in avoiding a potential strike before the Oct. 9 deadline for agreement. The stock may also be getting a boost from optimism ahead of Thursday’s White House summit between Trump and Chinese President Xi Jinping . Whenever the leaders meet, there’s always a chance Boeing comes up. What would actually matter is if the 200-aircraft commitment announced back in May becomes a firm order from a Chinese airline. Until an airline announces a firm order, it’s hard to give Boeing much credit for its reentry into the Chinese market. Wednesday’s rally took shares back above $200 — a welcome relief after the stock dropped from $209 to about $202 exactly one week ago after management gave a disappointing update at the Morgan Stanley Laguna Conference, citing challenges in stabilizing Boeing 737 Max production at 47 jets per month. Meta CEO Mark Zuckerberg’s keynote address at the company’s developers conference is the major after-the-bell event to watch. Meta Platforms shares have soared more than 20% since the company’s Muse personal AI agent launched earlier this month. In a commentary earlier in the day , we looked at what makes Muse so special and why the tech world and Wall Street are buzzing about it. Thursday earnings give us a read on consumer spending , with Olive Garden parent Darden Restaurants reporting before the opening bell and Costco out after the close. The key metrics for Costco are paid memberships and renewal rates, as well as gross and operating margins. On the data side, Thursday morning also brings data on new home sales and building permits. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust, including META, BA, COST.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
