The 10-year hit 5.22%. Then Hormuz talk cooled it

Rundown · 2026-09-25

The bond selloff made one more high on Thursday, then paused overnight. The 10-year touched 5.225%, its highest since 2007, and closed near 5.21%. The 7-year auction cleared at 5.085%, the highest since April 1993, and tailed. Late Thursday, Reuters reported that US and Iranian negotiators are exploring a phased deal to reopen the Strait of Hormuz in exchange for lifting the US blockade. Overnight, WTI is down $1.69 to $92.92, the 10-year has eased to 5.175% and gold is up $43.50 to $4,341.50. The yen is the strongest major: USD/JPY is down 0.64% after Japan's finance minister said Trump raised concerns about yen weakness. Index futures are modestly higher, with NQ +0.52% leading. The only 08:30 release is durable goods. Hormuz headlines can land at any hour, and a weekend follows today's close.

Overnight

Against Thursday's settles, as of about 06:45 ET (delayed quotes, not settles). ES (Dec) 7,786.00, +19.00 (+0.24%) from 7,767.00 · NQ 30,925.75, +159.00 (+0.52%) from 30,766.75 · YM 51,803, +86 (+0.17%) from 51,717 · RTY 2,861.0, +4.2 (+0.15%) from 2,856.8
The reference levels, and nothing more. Globex ranges so far: ES 7,748.50-7,792.50 · NQ 30,679.00-30,963.25 · YM 51,610-51,903 · RTY 2,851.0-2,867.9. All four opened in the lower part of their ranges and are now trading in the upper third. Thursday's ES low was 7,707.25, set in Thursday's overnight session
Asia was split, and thin. Nikkei 66,363.98, +850.21 (+1.30%). Hang Seng 24,510.10, -251.04 (-1.01%). Mainland China, Taiwan and South Korea were closed for holidays, so there was little regional liquidity to test Thursday's bond move. Japan's 10-year yield touched 3.115%, per Reuters, a level last seen in 1996
Europe, early trade: DAX 25,413.23, +146.70 (+0.58%) · FTSE 100 10,705.87, +25.87 (+0.24%). Reuters has the STOXX 600 +0.5% and on track for a weekly gain. German GfK consumer climate fell to -30.6 against -27.4 expected, and the DAX rose anyway: lower oil matters more to Europe this morning than domestic sentiment
What broke while the US was closed. The Hormuz report landed during Thursday's session, and it is still what the tape is trading on. According to Reuters, the obstacle is that neither side wants to give up its leverage first. Xi's Oval Office meeting ran about an hour and produced no concrete announcements on trade, chips or Taiwan. Norway raised rates on Thursday. Reuters counts five of the G10 central banks as having hiked this month

The Dollar & FX

DXY 101.05, -0.20 (-0.20%) from Thursday's 101.25 close (TradingView), range 101.02-101.31. Thursday's high of 101.40 was the highest since late July, and the index is still set for a second weekly gain. The overnight dip is yen strength plus lower oil, not a change in the Fed story. Trading Economics puts October hike odds near 70% this morning, and swaps are pricing three more quarter-point hikes over the next year
6J is carrying the move. USD/JPY 157.83, -1.01 (-0.64%) from 158.84, range 157.66-158.90. Finance Minister Katayama said Trump raised concern about yen weakness in his meeting with Prime Minister Takaichi this week. She also repeated that she is coordinating with Treasury Secretary Bessent. The two countries intervened jointly in late July, the first coordinated yen buying since 1998. Thursday's high was 159.04, and the market treats 160 as the level where Tokyo's tolerance is tested. The rebound ended a five-session losing streak for the yen
6E and 6B are at their overnight highs. EUR/USD 1.1398, +0.0018 (+0.16%) from 1.1380, range 1.1368-1.1401. GBP/USD 1.3244, +0.0026 (+0.20%) from 1.3218, range 1.3209-1.3250. UK GfK came in at -13 against -16 expected. The euro is up despite a weak German GfK, which puts the driver on the dollar side
6C is the laggard, and oil is why. USD/CAD 1.4140, +0.0005 (+0.04%) from 1.4135, range 1.4126-1.4154. Every other major gained on the dollar overnight. The loonie did not, because a $1.69 drop in WTI takes away the support crude had been giving it
6A is recovering. AUD/USD 0.7029, +0.0017 (+0.24%) from 0.7012, range 0.7004-0.7032, after a -0.4% Thursday. China was closed, so the Xi meeting's lack of substance has not yet been tested in Asian trade
Fed speakers today: Kansas City's Schmid at 09:20 (Investing.com, TradingView) and Cleveland's Hammack at 14:00 (TradingView only). TradingView also listed Williams at 05:15; the desk has not sourced what he said

Energy & Metals

CL: November settled $94.61, +$2.45 (+2.66%) on Thursday (Investrade and TradingView agree) and traded as high as $96.78. It is $92.92, -$1.69 (-1.79%) this morning. It opened at the overnight high of $94.75 and has been sold since, with a low of $92.14
The mechanism is the Hormuz report, not the balance sheet. Thursday's rally came from Iran's refusal to allow free passage and the Houthi attacks on Saudi military sites. Overnight's decline follows Reuters' account of the phased talks: Iran reopens the strait, the US lifts its blockade, and Tehran may get access to frozen assets. A Nordea strategist quoted by Reuters said markets "buy the rumour" on Middle East news but see caution into the weekend. The talks have no deadline, and none of the reporting is a signed agreement
Brent: the front of the curve is extremely tight. November Brent settled $106.60, +$3.52 (+3.41%) and is $105.71 now, range $104.51-$106.40. December Brent settled $100.22, so the November-December spread closed Thursday at $6.38, which is a very steep one-month backwardation. Continuous-contract charts may already show December, so check which month you are looking at. The November Brent-WTI gap widened to $11.99 at settle, from about $11.30 on Thursday morning
GC: December settled $4,298.00, -$20.40 (-0.47%) (Investrade and TradingView agree) and is $4,341.50, +$43.50 (+1.01%) now, range $4,290.30-$4,345.30, trading at its overnight high. It is the mirror image of Wednesday and Thursday. A 10-year at 5.2% and a dollar at a two-month high pushed gold below $4,300. With yields down 3bp and the dollar softer overnight, it is back above that level. The Iran headlines have not moved gold in either direction. Rates and the dollar have
Rates. 10-year 5.175%, -3.3bp on the morning (TradingView), after +9.8bp Thursday to about 5.21%, with a high of 5.225%. Trading Economics has it up 23bp over three sessions. 2-year 4.891%, -4.0bp. 2s10s is about 28bp, steeper than 25bp on Thursday morning. Reuters has the 30-year steady near 5.46%, after it reached 5.50% on Thursday, the highest since 2004

Where We Left Off

Thursday's RTH close, per AP: Dow 51,349.98 (-161.61, -0.3%) · S&P 500 7,704.13 (-1.90, -0.0%) · Nasdaq Composite 26,939.37 (+3.34, +0.0%) · Russell 2000 2,835.57 (-3.09, -0.1%). All four reconcile against Wednesday's published closes. Investrade matches to within 0.1 points
A flat close hid a volatile session. AP described stocks going through "a couple reversals" as yields and oil moved together, and breadth favoured decliners. Energy and health care led. Technology and industrials lagged, although several mega-caps (META, GOOGL, AMZN, AAPL) closed higher
The week so far, per AP: S&P 500 +0.7%, Nasdaq +1.6%, Dow -0.6%, Russell -0.9%. The Dow is heading for a fourth straight losing week. What carries over: the divergence between the indices is back. Mega-cap tech is holding up against 5% yields, while the Dow and the Russell are not. A YM or RTY trader is trading a different market from an NQ trader

Yesterday's Data

On The Calendar Today

Time ET · Event · Consensus · Prior · Hits

05:15 · Fed's Williams (New York), already spoken · n/a · n/a · USD · GC

08:30 · Durable goods orders, Aug · -0.3% to -0.4% · 1.1% · USD · ES · GC

08:30 · Durables ex-transportation, Aug · 0.6% · 0.4% · USD · ES

08:30 · Durables ex-defense, Aug · n/a · 1.3% · USD

08:30 · Core capital goods orders, Aug · 0.5% · 0.0%-0.2%, sources differ · USD · ES

09:20 · Fed's Schmid (Kansas City) · n/a · n/a · USD · GC

10:00 · UMich sentiment, Sep final · 47.6-47.8 · 51.7 · USD · ES

10:00 · UMich 1-yr inflation expectations, Sep final · 4.6% · 4.0% · USD · GC · ES/NQ

10:00 · UMich 5-yr inflation expectations, Sep final · 3.4% · 3.3% · USD · GC

10:00 · Atlanta Fed GDPNow update · n/a · 5.1% · USD

13:00 · Baker Hughes oil rig count · 453 · 452 · CL

14:00 · Fed's Hammack (Cleveland) · n/a · n/a · USD · GC

15:30 · CFTC Commitments of Traders · n/a · n/a · ES · GC · CL

All day · Xi state visit concludes · n/a · n/a · ES/NQ · 6A

Weekend · US-Iran talks on Hormuz · n/a · n/a · CL · GC · USD

The calendar was enumerated from two sources. TradingView and Investing.com both list the durable goods set at 08:30 and UMich at 10:00. Census's own page confirms the July priors (1.1% headline, 0.4% ex-transport, 1.3% ex-defense). It does not give the core capital goods prior, and the two calendars disagree on it, so the table shows both. Neither calendar lists the advance goods trade balance or inventories today. Friday's fixed release, the Baker Hughes count at 13:00, is in the table.

The fulcrum is 10:00, not 08:30. Durable goods is a volatile, transport-driven headline, and a -0.3% consensus against +1.1% is mostly an aircraft reversal. The number that matters for this tape is UMich 1-year inflation expectations at 4.6%, up from 4.0%. Markets are pricing roughly three more hikes because of energy-driven inflation. A final read at or above 4.6% supports that pricing. A downward revision would add to the relief the Hormuz report has started. Past both prints, the day's other risk is weekend exposure to Iran talks with no deadline.

Index Movers

Ranked by index contribution. The Dow is price-weighted, so $1 in any constituent is worth roughly 5.9 Dow points (divisor about 0.168, secondary source; treat these as approximate). Closes are from TradingView's feed.

META $777.59, +$33.49 (+4.50%), the largest single lift to the S&P 500 and Nasdaq-100 among the names the desk checked. Meta Connect ran Wednesday and Thursday, JPMorgan raised its target to $920, and the Muse agent is now coming to Meta's AI glasses. GOOGL +1.34% to $342.36 recovered part of Wednesday's Muse-driven loss. LLY +2.68% to $1,181.89 was the other large gain in health care
GS $923.29, -$13.07 (-1.40%), about -78 Dow points and the largest Dow drag for a second straight session. It has fallen for three sessions since the report of its talks to buy Palmer Square
The Dow's rate-sensitive names: CAT -$6.77 (-0.83%), about -40 points; SHW -$6.06 (-1.86%), about -36; HD -$4.54 (-1.53%), about -27, with Reuters putting mortgage rates at about 7%. GS, CAT, SHW and HD together are worth about -180 Dow points, more than the index's 161-point loss. V +1.79% (about +38) and UNH +1.00% (about +22) offset part of it
ORCL $139.54, -$5.02 (-3.47%) (S&P 500). Oracle sent a force majeure notice on Project Jupiter, the $165B New Mexico data centre tied to Stargate. Bloomberg reports the aim is to delay payment if the project is not online in 2028. Oracle says the project "remains on our planned schedule." The notice matters beyond Oracle because it is the first sign of strain in AI data-centre financing, and that financing is what the AI part of the rally rests on
COST $896.48, -0.91% in Thursday's session (S&P 500, Nasdaq-100). After the close it reported Q4 EPS of $6.75 against $6.52 expected, with $0.15 from one-off tariff refunds. Revenue was $95.72B against $94.86B. Shares were up only about 0.2% in extended trading, per Benzinga. It beat on both lines and extended trading barely moved

What Would Change The Read

Scoring Thursday's calls. The 5.15% level on the 10-year broke: yields reached 5.225%. The 7-year auction was sloppy, with a 5.085% high yield against 5.078% when-issued and bid-to-cover of 2.42 against 2.50. The consequence we flagged did not follow. NQ and RTY were supposed to carry the duration risk, but the Nasdaq finished +0.0% and the Russell -0.1%, because META carried the tape. Claims printed 197K, lower than the 201K consensus. The Xi meeting produced nothing concrete, as flagged. The Brent-WTI gap widened again, to $12
Whether the Hormuz report firms up or fades. Most of the overnight move in CL, GC, the 10-year and the yen comes from one set of sourced reports about talks that have no deadline. Confirmation from either government would extend the move. A denial, or new incidents at sea, would reverse it, and markets take weekend exposure into today's close
Whether 5.225% holds as the high on the 10-year. It is the reference level for the whole complex. UMich inflation expectations at 10:00 is the event most likely to test it today
Whether USD/JPY reaches 160 again. A comment from Washington about the yen has done something the rate gap had not done all week. After the July joint intervention, any approach toward 160 now comes with intervention risk from both governments
Whether gold holds $4,300 if yields turn higher again. Gold has been trading off real yields and the dollar, not off the Middle East. If the 10-year goes back through 5.2%, the test is whether gold stays above the $4,290 overnight low

The Bottom Line

Thursday was the bond market's highest point so far: a 19-year high on the 10-year, a 33-year high at the 7-year auction and a 30-year yield at 5.5%. The equity indices finished flat anyway, because Meta and the rest of mega-cap tech absorbed it. The overnight relief did not come from the Fed or the data. It came from a Reuters report on Iran, and that is what sent crude lower, lifted gold and eased yields. A Washington comment on the yen did the rest of the dollar's work. Today's data is minor, UMich inflation expectations are the one print that could move rates, and the risk after the close is a weekend of talks on Hormuz.

_For informational purposes only. Not investment advice._