Dow, S&P 500, and Nasdaq Slip as Bond Yields Surge Despite Micron Earnings Beat

TLDR

• The Dow, S&P 500, and Nasdaq all fell on Thursday, giving back earlier gains.
• The 10-year Treasury yield rose to around 5.3%, a fresh multidecade high.
• Micron beat earnings expectations and raised its outlook, but its stock barely moved.
• A manufacturing report showed slower growth than expected, along with rising prices.
• Jobless claims fell for a fourth straight week, pointing to a stable labor market.

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Stocks dropped on Thursday as rising bond yields overshadowed a strong earnings report from Micron. The move came on the first trading day of October.

The Dow Jones Industrial Average fell about half a percent. The S&P 500 slipped 0.3%, and the Nasdaq Composite dropped around 0.3% as well.

All three indexes had been higher earlier in the day. Those gains faded as bond market pressure built through the morning.

Bond Yields Keep Climbing

The 10-year Treasury yield rose again on Thursday, reaching about 5.3%. That marks a new multidecade high for the yield.

$550 billion has been wiped out from US stocks in the last 45 minutes.

Reasons:

1. US 10-year, 20-year, and 30-year Treasury yields all just hit a new 24-year high.

2. US Manufacturing PMI also came in below expectations. https://t.co/XJQZbJTavi pic.twitter.com/38Fnouv1ja

— Bull Theory (@BullTheoryio) October 1, 2026

This followed a rough quarter for bonds. The bond market had just suffered its worst quarterly performance in decades heading into October.

Higher yields tend to make borrowing more expensive. They can also make stocks look less attractive compared to bonds, since investors can earn more from safer assets.

Sectors tied to interest rates felt the pressure most. Materials, real estate, and financial stocks were among the biggest decliners during the session.

Only energy and technology sectors managed to stay in positive territory. Fewer than a third of S&P 500 stocks were rising at one point during the morning.

Manufacturing Data Adds Pressure

Two separate reports on manufacturing activity came out Thursday. Both pointed to slower growth than expected.

The S&P 500’s Manufacturing Purchasing Managers Index came in at 55.9 for September. That was below the earlier estimate of 57.

A separate report from the Institute for Supply Management showed manufacturing prices rising sharply in September. Rising input costs can squeeze company profits and fuel inflation concerns.

These reports followed a weak close to the third quarter. The Dow posted losses for both September and the full quarter, while the Nasdaq managed to rise.

Micron reported fourth quarter earnings that beat Wall Street’s expectations. The memory chip maker also raised its outlook for the first quarter.

MICRON $MU Q4’26 EARNINGS HIGHLIGHTS

🔹 Revenue: $54.23B (Est. $51.07B) 🟢; +379% YoY
🔹 Adj. EPS: $33.42 (Est. $31.61) 🟢
🔹 Adj. Gross Margin: 87.0% (Est. 86.1%) 🟢

Q1 FY27 Guide:
🔹 Revenue: $61.5B ± $1.5B (Est. $57.02B) 🟢
🔹 Adj. EPS: $38.15 ± $1.00 (Est. $35.40) 🟢
🔹… pic.twitter.com/DvLalHRPYe

— Wall St Engine (@wallstengine) September 30, 2026

Despite the strong results, Micron shares were little changed on the day. Investors appeared more focused on bond market moves than individual earnings.

Other chip and tech names had mixed results. One major chipmaker rose slightly after a strong September, while another semiconductor stock fell after gaining 30% the prior month.

The labor market showed signs of stability. Initial jobless claims fell for a fourth straight week in the latest data.

A separate report on planned layoffs, from Challenger, Gray & Christmas, showed companies announced fewer job cuts in September. At the same time, companies have not been rushing to hire new workers.

These labor reports come ahead of the closely watched monthly jobs report due Friday. That report will give a fuller picture of hiring and unemployment trends.

Nike is set to report earnings after the market closes Thursday. The company’s stock has been trading near its lowest levels since 2014, and investors will be watching for signs of a turnaround.

As of late morning trading, the 10-year yield sat at 5.33%, while the 2-year yield fell to 4.852%. The Dow was down about 328 points, the S&P 500 down 0.36%, and the Nasdaq down 0.31%.