Stocks Slip, Yields Surge

Stocks fell Wednesday as Treasury yields and oil climbed, even as business activity remained strong

Author

Josh Banuelos
September 24, 2026

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Market News

Yields Hit 2007 Levels, and Stocks Slide

Stocks fell Wednesday as Treasury yields climbed to levels not seen since 2007. The S&P 500 dropped 0.75% to 7,706.03. The Dow lost 352.10 points (0.68%) to 51,511.59, and the Nasdaq gave up 308.24 points (1.13%) to 26,936.04, one day after closing at a record. Small caps had it worst. The Russell 2000 fell 1.77% to 2,838.66, and in the S&P 500, stocks that fell outnumbered those that rose by almost two to one.

Much of the pressure came from bonds, with rising oil adding another inflation concern. Treasury data shows the 10-year yield rose 15 basis points to 5.11%, its highest close since July 2007. The 5-year crossed 5% during the day for the first time since 2007. The 2-year climbed 14 basis points to 4.85%, its highest since June 2024. Higher yields make borrowing more expensive, and they make bonds look better next to stocks. That usually hits small companies with a lot of debt, and pricey growth stocks, first.

The spark was a strong read on the economy. S&P Global's flash PMI for September jumped to 58.4 from 56.0, the fastest private-sector growth in more than five years. Services (58.7) and manufacturing (57.0) both came in well above forecasts. Companies also said their costs were rising at the fastest pace in about four years, mostly because of fuel and shipping. Fed Governor Michael Barr added to it, saying "further policy adjustments are likely to be needed" to bring inflation down. The Fed raised rates to 3.75%–4.00% on Sept. 16, its first hike since 2023. Futures now price roughly a 70% chance of another hike at the Oct. 27–28 meeting.

Rate-sensitive sectors were among the weakest performers. Utilities fell 1.9% and real estate lost 1.5%. Energy was the only sector to finish higher, up about 1%, as oil prices jumped nearly 4% and Brent moved back above $100 a barrel. U.S.-Iran discussions at the U.N. ended without a clear breakthrough.

In Big Tech, Alphabet fell 3.8%, Broadcom 2.6% and Amazon 2.2%, while Meta rose 1.0% and Microsoft 0.5%. Meta's Muse AI agent can now book travel for users, and that dragged down online travel stocks: Expedia, Airbnb and Booking each fell 5% or more. Cybersecurity went the other way, with Palo Alto Networks and CrowdStrike both up about 5%.

Peel Take: Wednesday’s selloff wasn’t about a weakening economy. Business activity was strong, but companies also reported rising costs, reinforcing expectations that the Fed may need to keep rates higher for longer or hike again. Treasury yields moved higher, with the 10-year closing at 5.11%, while rising oil added another inflation concern. That’s a tougher backdrop for equities, especially rate-sensitive and highly leveraged stocks. For now, the 10-year may matter more to the market than any single ticker.

What's Ripe

Palo Alto Networks (PANW) 5.00% 

  • Closed at $393.30, the best performer in the S&P 500 and about 1.4% below its 52-week high, after launching Unit 42 Continuous Frontier AI Defense on Tuesday.

  • The annual subscription service uses Anthropic’s Claude Mythos 5, OpenAI’s GPT-5.6-Cyber and other models to continuously test corporate systems for vulnerabilities. Cybersecurity was strong broadly, with CrowdStrike up 4.97% and Okta 4.45% while the tech sector fell 0.47%.

  • Peel Take: If hackers get frontier AI, the companies they're attacking need it too. Palo Alto is putting frontier models to work continuously testing corporate systems for vulnerabilities, then selling the service on an annual subscription. The next question is whether the new offering turns into meaningful bookings and recurring revenue. For now, cyber was one of the few bright spots on a rough day for tech.

IonQ (IONQ) 4.42% 

  • Closed at $42.54 after rising as much as 13% intraday, following the announcement of a real-time quantum error-correction decoder that runs on a single standard CPU and was tested on simulated circuits of up to 408 logical qubits.

  • IonQ also said its Superion 256 will become the first on-site quantum computer at NVIDIA’s Accelerated Quantum Research Center, connected to NVIDIA’s GB200 NVL72 system, with installation planned for 2027.

  • Peel Take: Put Nvidia and quantum computing in the same announcement and traders are going to pay attention. This one also has technical substance: error correction is one of the biggest hurdles to useful fault-tolerant quantum computing. Still, IonQ gave back much of its early gain before the close, another reminder of how volatile the quantum trade remains.

What's Rotten

Paychex (PAYX) 8.77%

  • Closed at $104.49, the worst performer in the S&P 500. Fiscal Q1 adjusted EPS was $1.34 versus $1.32 expected, while revenue rose 6% to $1.63B and came in roughly in line with expectations.

  • Management Solutions, its largest payroll and HR segment, grew 4% to about $1.2B, which the CFO called “slightly below our expectations.” PEO and Insurance Solutions grew 12%, while full-year revenue guidance stayed at 5–6%.

  • Peel Take: Beat on earnings, fall 9%. Rough. The headline quarter wasn't bad, but growth in Paychex's largest segment came in slightly below management's expectations. Full-year guidance stayed intact, so this wasn't a broken-quarter story. Investors were simply much less forgiving of the slower growth profile.

Expedia (EXPE) 7.72%

  • Closed at $259.04, the second-worst performer in the S&P 500 and about 24% below its 52-week high of $342.

  • Meta's Muse AI agent launched earlier this month and has become the top free app in the U.S. It can handle travel-booking tasks, raising concerns that users could increasingly bypass online travel agencies. Airbnb fell 7.56% and Booking Holdings 5.07%.

  • Peel Take: This wasn’t an earnings problem. Expedia sold off because investors are starting to ask what happens if AI agents become the front door for travel search and booking. That could mean less traffic flowing directly through online travel agencies and more pressure on commissions over time. The key point is that this is still a disruption risk, not a reported hit to bookings or revenue.

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