The Long End Finds Its Bid
October 12, 2026
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Bonds found their footing last week. The 10-year Treasury yield closed Monday at its highest level since 2002, then eased to finish the week at 5.24%.1 Strong demand at the 10-year auction set the tone. The auction cleared at 5.30%, the highest auction yield since 2000, with solid buying from foreign and institutional investors.2 The 30-year auction followed at 5.62%, with strong demand.3 That was a welcome change from late September, when weak demand for 5-year notes forced Treasury to pay up to sell its debt.4 With last week’s Treasury auctions offering the highest yields in more than two decades — roughly 30 to 50 basis points above early-September levels — investors appear more willing to lend to the government.5
The prior week’s soft jobs report also eased some pressure. September payrolls rose just 29,000, well short of expectations, prompting markets to push back the expected timing of the next Federal Reserve (Fed) rate hike from October to December.6 Still, minutes from the September Federal Open Market Committee meeting showed most officials expect another increase by year-end.7
Two developments dominated equity market headlines last week. On Thursday, a report that OpenAI's revenue was running below earlier expectations knocked chip stocks down more than 3%.8 On Friday, SpaceX's agreement to buy a nationwide spectrum portfolio for Starlink Mobile sent T-Mobile, AT&T and Verizon down 10% to 13%, while tower owners rallied.9 The SpaceX news matters for bond investors because the large telecom companies are significant issuers of investment-grade credit, so a new, well-funded competitor deserves close attention. Even so, the S&P 500 Index gained 1.15% for the week and finished just shy of a record.10
This week brings a lighter Treasury calendar, with no coupon auctions, ahead of the 20-year bond and 5-year Treasury Inflation-Protected Securities (TIPS) auctions the following week.11 The main event is Wednesday's September Consumer Price Index (CPI), with headline inflation expected to rise to 3.6%.12 Third-quarter earnings season also begins, led by major banks reporting Tuesday and Wednesday, while Fed Chair Kevin Warsh is scheduled to speak Thursday.13 With supply light heading into CPI, a benign inflation print could give bonds room to extend last week's rally.
Sources:
1,3,5Bloomberg
2,7CNBC – 10-year Treasury yield backs off from 24-year high after solid bond auction eases demand fears; 10/7/26
4PrimeRates – Treasury 5-Year Note Auction Clears 5.033%, Highest Since June 2006; 9/24/26
6CNBC – Traders now see little chance of a Fed rate hike in October after weak jobs report; 10/2/26
8,9,10Portfolio Terminal – Stock market week in review, Oct. 5–9, 2026: two records, then an AI scare; 10/10/26
11BrinkerAdvisor Rates – Upcoming Treasury auctions; as of 10/12/26
12,13OneTrader – US Stock Market Week Ahead: CPI, Bank Earnings and Fed Speakers (October 12–16, 2026); 10/11/26
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