September 30, 2026

NASDAQ up 0.24%, Dow down 0.86%. Why long-term interest rates rose despite lower PCE | 9/30 US Stocks

Ratahi-chan’s Daily Market Note
US Market Report: September 30, 2026

Good morning.
I’m Ratahi, your stock-investing heroine.

In the US market on September 30, the NASDAQ Composite rose, while the S&P 500, NY Dow, and Russell 2000 fell. August PCE came in below expectations, and the market initially reacted with higher stock prices and lower short-term interest rates.

However, following an upward revision to GDP and a rise in crude oil prices, the 10-year Treasury yield climbed to 5.29%. It was a day where long-term interest rates did not fall on inflation cooling alone, and the temperature gap between high-tech stocks and the Dow/small-cap stocks widened.

Today’s Major Markets

Stock indices, SOX, US Treasury yields, and VIX are based on closing prices/levels as of September 30, US time. Foreign exchange and crude oil are daily values from their respective data providers.

Key Points That Moved the US Market

1. Stalled after PCE downside, due to strong GDP
August PCE was 3.4% year-on-year, and core PCE was 3.0%, both coming in below market expectations.

Meanwhile, the final estimate for real GDP in the April-June quarter was revised upward to an annualized 2.2% growth, and personal consumption also grew by 3.8%. It is a combination of prices being lower than expected, but demand being stronger than anticipated. The stock market could not maintain its morning gains, and the S&P 500 and NY Dow fell.

2. 2-year Treasury yields fell, 10-year yields rose
The US 2-year Treasury yield fell from 4.89% to 4.88%, while the 10-year yield rose from 5.26% to 5.29%.

Short-term interest rates reflected the lower PCE, but long-term interest rates were influenced by the upward revision to GDP, the rebound in crude oil, and concerns over Treasury supply and demand. It was a day where short-term and long-term interest rates moved based on different factors.

3. Market breadth is weak despite NASDAQ gains
The NASDAQ was up 0.24%, but the S&P 500 was down 0.25%, the NY Dow was down 0.86%, and the Russell 2000 was down 0.39%. The SOX was also mostly flat.

Hewlett Packard Enterprise rose 3.9% following an upward revision to its sales outlook for its AI-focused networking business. It is necessary to watch whether buying is spreading beyond just the NASDAQ to the Dow, small-cap stocks, and the SOX.

Sector-specific movements

The following are the rates of change using major sector ETFs.

While information technology rose, financials, real estate, and consumer staples fell. It was not a uniform bullishness on the economy, but rather a noticeable concentration of funds into large-cap technology stocks.

Market outlook from interest rates, foreign exchange, and crude oil

The dollar-yen pair maintained the 157 yen level. Even though US 2-year Treasury yields fell, the yen did not appreciate.

WTI crude oil rose 2.09% to $90.65. While higher crude oil prices support energy stocks, they also serve as a warning sign for inflation.

The VIX rose to 16.34, but rather than panic, it was a move to adjust positions while watching interest rates and economic indicators.

Impact on the Japanese market

Semiconductor stocks: The SOX index was mostly flat. We will be watching the reaction in the US market on October 1st following the Micron earnings report.
Large-cap growth stocks: The NASDAQ gain is a support, but the 5.29% yield on the US 10-year Treasury note is a factor capping the upside.
Export stocks: The dollar-yen exchange rate in the 157 yen range could support yen-denominated earnings.
Transportation, Utilities, and Materials: Caution is needed regarding rising costs due to higher crude oil prices and a weaker yen.

Notable news after the close

Micron reports record quarterly earnings
Micron Technology announced revenue of $54.23 billion and non-GAAP EPS of $33.42 for the fourth quarter of fiscal year 2026. The revenue forecast for the first quarter of fiscal year 2027 is centered around $61.5 billion.

Meanwhile, the stock price in after-hours trading was up about 0.6% from the regular session closing price. If the reaction remains limited despite strong earnings, it is possible that expectations were already priced in. We want to confirm the reaction in regular trading on October 1st.

Ratahi’s Analysis

While short-term interest rates fell due to the lower PCE, long-term interest rates rose as the market focused on the strength of GDP and higher crude oil prices.

As a result, even though information technology stocks were bought, the gains did not spread to small-cap stocks, real estate, or financials. Beyond just “avoiding rate hikes,” the key to stock selection is whether companies can demonstrate profit growth even under high long-term interest rates.

Things to check going forward

Micron: Regular trading on October 1st and the ripple effect on semiconductor stocks
US 10-year Treasury: Whether it continues to stay above 5.25%
ISM and employment indicators: Whether strong GDP will also be reflected in future corporate activity and employment

Today’s Summary

On September 30th, short-term interest rates fell due to the lower PCE, while long-term interest rates rose against the backdrop of upward revisions to GDP and higher crude oil prices. The NASDAQ rose, but the Dow and small-cap stocks fell. It is important to look not only at the indices, but also at the difference between 2-year and 10-year Treasury yields and whether the gains are spreading across the entire market.

— Stock Heroine Ratahi-chan

Reference Information / Sources

Disclaimer

*This report is intended to provide information to deepen understanding of the market and does not recommend the buying or selling of any specific financial products. Please make investment decisions at your own risk.

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