10-Year Treasury Yield Tops 5% as PMI Data Beats, Tech Stocks Retreat

The 10-year Treasury yield jumped above the 5.00% mark on Tuesday's session after the U.S. Services PMI report came in far stronger than economists had forecast, signaling more robust growth than the market had priced in. The PMI (Purchasing Managers' Index) tracks activity in the services sector, and a sharp upside surprise reduces the odds that the Federal Reserve will keep cutting interest rates at its recent pace. Higher yields make future corporate earnings — especially those of growth and technology companies — worth less in today's dollars, which is why tech shares retreated as bond yields and oil prices climbed together. Investors had been leaning on soft 'hard' economic data, like payrolls and retail sales, to justify continued rate cuts. A stronger services reading complicates that narrative. What remains unresolved is whether this PMI beat marks a genuine reacceleration in growth or a one-off reading. The bond market's reaction — a yield spike rather than a shrug — suggests traders are taking it seriously for now.