10-Year Yield Above 5%, Oil Near $90, And Bitcoin: 3 Charts That Could Test The Stock Rally

Investors will watch the Fed's September meeting minutes, ISM services data, jobless claims, and consumer sentiment for clues about the economy and interest rates.

• The 10-year Treasury yield opened the week at 5.283% after pulling back from a level not seen since 2002.
• WTI crude traded near $91 after OPEC+ kept November production targets unchanged, while Brent ended last week above $102.
• Applied Digital is among the companies reporting earnings this week, while Delta Air Lines will also provide an update amid elevated oil prices.

The S&P 500 is still close to a record, but three charts could show how much longer the market can keep holding up – the 10-year Treasury yield, oil prices and Bitcoin (BTC). The 10-year yield is still above 5%, West Texas Intermediate crude is near $90 a barrel, and Bitcoin’s price is trying to stay above $86,000.

The key event this week comes Wednesday, when the Federal Reserve releases minutes from its September meeting. Investors will look for clues about how officials view inflation, the labor market, and the path for interest rates after the Fed raised rates by 25 basis points last month.

Several economic reports could also move markets this week, including ISM services data Monday, the trade balance Tuesday, jobless claims Thursday and the University of Michigan's preliminary consumer sentiment reading Friday.

Treasury Yields Stay Above 5%

The 10-year Treasury yield opened the week at 5.283%, after pulling back from a level reached last Thursday that had not been seen since 2002.

10-year and 2-year United States Government Bond performance year-to-date on October 5 as of 5:00 a.m. ET | Source: Koyfin

The move comes after softer labor-market data reduced expectations for another Federal Reserve rate hike. Nonfarm payrolls increased by 29,000 last month, below the 84,000 economists had expected, while the unemployment rate rose to 4.2%.

The weaker jobs data was not enough to push the 10-year yield below 5%. Reports last week also said that the U.S. was sending another aircraft carrier to the Middle East helping push oil prices and Treasury yields higher.

The two-year Treasury yield, which is more sensitive to expectations for Fed policy, stood at 4.839%, about 0.84 percentage point above the top of the Fed's current 3.75%-4% target range.

Markets now see a 20% probability of another rate increase at the Fed's October monetary policy meeting, according to CME FedWatch.

The Fed's minutes Wednesday will offer a closer look at the debate behind September's rate decision. Sixteen of 18 officials had projected at least one more rate increase this year. Minneapolis Fed President Neel Kashkari told Bloomberg Television last week that he does not know how high rates will have to go to cool prices. The next rate decision is scheduled for Oct. 28.

Oil Keeps Inflation Risk In Focus

WTI crude traded at $91.11 a barrel, down 1.9% in early Monday trading. Seven core OPEC+ members kept November production targets unchanged at a Sunday meeting, extending the pause that began in October. Most members are producing below their targets because of the war. The group is scheduled to meet again Nov. 1.

WTI Crude Oil futures performance year-to-date on October 5 as of 5:00 a.m. ET | Source: Koyfin

Oil prices moved sharply higher last week. Brent crude jumped more than 4% Thursday to $102.31 a barrel, while WTI settled at $92.87.

Higher energy prices could add to inflation pressures and complicate the Fed's policy outlook. Fed Chair Kevin Warsh cited an energy shock tied to the Iran war when the central bank raised rates in September.

The Fed's latest projections showed 2026 inflation, measured by its preferred PCE gauge, rising to 3.7% overall and 3.4% excluding food and energy. Both estimates were 0.1 percentage point higher than the June forecasts.

Higher oil prices are also becoming an issue for airlines. Delta Air Lines (DAL) reports this week, with analysts expecting earnings per share (EPS) of $1.88 on revenue of $18.83 billion. 

DAL stock edged 0.5% higher in pre-market trade on Monday. On Stocktwits, retail sentiment around the company trended in ‘bullish’ territory over the past week, alongside ‘high’ levels of chatter. 

Bitcoin Holds Up Above $86,000

Bitcoin traded at $86,374, up 0.64% Monday. The move comes despite a 10-year Treasury yield above 5%, which gives investors a higher-yielding alternative to an asset that does not generate income.

Bitcoin’s price performance against the S&P 500 and 10-year United States Government Bond yields over the past 6 months on October 5 as of 5:00 a.m. ET | Source: Koyfin

ETF demand has continued to support Bitcoin. Spot Bitcoin ETFs attracted $3.52 billion in August and about $2.7 billion in September, according to Farside Investors. About $2.42 billion of September's total came in just six sessions.

BONUS CHART: Nvidia, Semis Are Doing The Heavy Lifting

Nvidia reached an all-time intraday high Friday, while semiconductor stocks continued to outperform the broader market. The VanEck Semiconductor ETF (SMH) has gained 60.74% in the last six months, compared with a 17.32% gain for the S&P 500.

Nvidia has gained 31.88% over the same period, while Advanced Micro Devices (AMD) has surged 191.45%. AMD closed at a record $615.52 last month and briefly surpassed a $1 trillion market capitalization that day.

The strength in semiconductor stocks has helped keep the broader market near record levels even with Treasury yields elevated. 

AMD, NVDA stocks price performance against S&P 500, VanEck Semiconductor ETF price performance over the past 6 months on October 5 as of 5:00 a.m. ET | Source: Koyfin

Applied Digital (APLD), which develops data centers for AI workloads, is scheduled to report earnings on Wednesday. Analysts are expecting the company to report a loss of $0.30 per share and revenue of around $125 million. 

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