Market Close: Stocks Slide, Rising Yields Can Break Things, Mortgage Rates Rise • 10/7/26

0:00See NBC Business News Update market close. I'm Jessica Ettinger. Wall Street. In the red Wednesday, opening Thursday morning after a pullback from stocks from record highs, bond yields rose. The yield on the 10-year Treasury hit a 24-year high, 5.35 percent. That was Wednesday morning. By Wednesday afternoon, it pulled back a bit because of decent demand at a government bond auction. The Dow was down 341 points, a half percent led lower by shares of Caterpillar, which were down more than 5 percent. The S &P 500 index fell 17 points, the Nasdaq down 61 points. On those bond yields that seem to be marching higher, here's Kai Welts, Chim Carson from the Chicago Board Options Exchange on CNBC.

0:51If it continues, it is going to break things very quickly. What number is going to break things then? Five and a half, five and a quarter, six percent? Do we know? I think we're getting very close. I'd say we're probably 20 basis points away, but it's less about the basis points. It's more about that move. So it's how fast does it move? If it keeps ticking, ticking, ticking, you're kind of right up against the edge. You're on this cliff. But I'm telling you, we're getting up to that edge and you can see it happening. At some point, we'll wake up one morning and bonds will move 20 basis points along the curve and things will really start to break.

1:23Investors are talking now about the Terra trade. There are reasonable alternatives to stocks and its bonds. The stock market does not tend to react well to real rates going up because there's an alternative to equities and bonds. There's less risk, so you sell stocks and buy bonds. This is Ariel Investments' Charlie Bobrinskoy on CNBC. I have been on your show a lot of times over the last seven years, and the whole time I pretty much said avoid bonds. Bonds are not good to have in this inflationary environment. For the first time, I would say bond investors are now finally getting compensated for inflation and can earn a real rate of return.

2:01A fresh three-year high for mortgage rates on Wednesdays would-be homebuyers start to walk away from deals if they don't have a decent home loan rate locked in. Mortgage rates loosely follow the yield on the 10-year Treasury. Here's CNBC's Diana Olick. Mortgage rates moved even higher again. And the average rate on the 30-year fixed rose seven basis points to 7.63 percent, according to Mortgage News Daily. Pending home sales in September dropped a steep 8 percent year over year. That's according to a new report from Zillow. And that's a big number, but it should actually come as no surprise, because look at the mortgage numbers.

2:36Mortgage demand has been tanking steadily over the past month. Webull shares tanked 19 percent on Wednesday. CNBC's Eamon Javers with exclusive details on a congressional report that shows the stock trading app may be connected to China. The new report alleges that the company, which has 28 million global users, is quietly tied in structural ways to the government of the People's Republic of China, representing a national security threat to American finance. In a statement, the company said in part, Weeble's U.S. business is conducted from its global headquarters in St. Petersburg, Florida, while U.S.

3:14customer data is stored in the U.S. and access to sensitive customer data is controlled by the U.S. The American trucking industry discovered a catch with President Trump's order allowing highway truckers to use off-road so-called red-dyed diesel in their vehicles. Red-dyed diesel is held to the side for ag equipment and construction equipment and is often taxed at a lower rate. The White House, however, did not eliminate excise taxes on that fuel for truckers. It only deferred it. The trucking industry may face a big bill down the road. On Thursday's watch list, we get earnings from PepsiCo. We find out how many people applied for unemployment benefits last week.

3:53We also get some new retail sales data. I'm Jessica Ettinger, CNBC. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab, provides an information-packed daily market preview on stock updates, U.S. and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.