[October 1, 2026] Historic Surge in Long-Term Interest Rates Intersects with Resilience in AI-Related Stocks
Good morning, this is Hal.
Based on the attached ‘US Stock Market Trends Survey_4,’ I will review the US stock market for yesterday, October 1, 2026. Yesterday, the first day of the fourth quarter, trading began under a very strong headwind as US Treasury yields surged to their highest levels since 2002.
On the other hand, major AI-related technology stocks showed resilient movement, supporting the market, which prevented major stock indices from falling and allowed them to end the day in slightly positive territory.
It was a day of deepening polarization, with a clear divide between stocks sold off due to aversion to rising interest rates and stocks bought due to expectations of AI growth.
Today’s Market Overview
Despite being exposed to the pressure of historic interest rate hikes, the three major indices rose slightly, driven by large-cap tech stocks.
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S&P 500 Index: 7,666.45 (+14.91 / +0.20%)
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Dow Jones Industrial Average: 50,926.56 (+20.51 / +0.04%)
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NASDAQ Composite Index: 26,871.60 (+10.53 / +0.04%)
The ‘Three Protagonists’ That Moved the Market
The main factors that drove market sentiment yesterday and divided the fortunes of different sectors are the following three points.
Historic Surge in US Treasury Yields and Caution Regarding Corporate Debt
Bonds were sold off due to concerns over expanding fiscal deficits and inflation, causing the 10-year US Treasury yield to spike to 5.34% at one point. Caution regarding the refinancing of massive corporate debt maturing in the coming years at higher interest rates intensified, acting as a significant weight on the entire stock market.
Strength of Technology and AI-Related Stocks and Self-Sustaining Growth Power
Even amidst the headwind of rising interest rates, large technology companies continued to see strong capital inflows, buoyed by strong earnings from major semiconductor firms demonstrating the strength of AI demand and the announcement of massive share buybacks backed by abundant cash reserves.
Escalation of Middle East Tensions and High Energy Prices
Geopolitical risks in the Middle East, such as the conflict between Iran and Israel, increased, leading to a rise in crude oil prices. The surge in energy prices has reignited inflation, and concerns about stagflation, which could cool the economy, have led to a cautious stance among investors.
Hal’s Perspective: Clear Polarization Between Sectors Brought About by the Interest Rate Surge
Today, I will explain the impact of the surge in long-term interest rates on each sector and the background of the capital movement.
Concentration of capital in technology stocks resistant to interest rate hikes: Even in an environment where the 10-year US Treasury yield exceeds 5.3%, large technology stocks with abundant cash on hand and less susceptibility to rising borrowing costs were bought. These stocks, which possess the powerful growth story of AI, are functioning as a safe haven for capital in an uncertain market environment.
Decline in consumer staples and financial stocks due to reduced dividend appeal and increased interest burdens: On the other hand, because high yields can now be obtained from government bonds, sectors like consumer staples, which were attractive for their stable dividends, were sold off significantly. Additionally, the financial sector has been showing weak movement due to concerns over unrealized losses on bond holdings and the risk of reduced lending as interest rates rise.
Notable Stocks: Stocks bought for strong performance and AI demand versus those sold due to actual consumption slowdown and high interest rates
[Gainers]
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Accenture (ACN): +15.77%
Fourth-quarter earnings significantly exceeded market expectations, and the strength of consulting demand for corporate AI adoption was confirmed, leading to a sharp surge based on future growth expectations.
As the importance of credit risk management increases, the company’s monopolistic position in the data analytics field and high pricing power were recognized, leading to a significant rise as it benefited from capital inflows into the information technology sector.
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Synopsys (SNPS): +12.78%
As the design of AI chips becomes more complex, the growing demand for the company’s design software was recognized, and the announcement of a partnership with a major IT company was also well-received, leading to heavy buying.
[Losers]
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McCormick (MKC): -4.87%
Third-quarter profits exceeded market expectations, but this was due to a one-time tax refund; actual sales growth remained flat, highlighting a decline in consumer demand and leading to widespread disappointment-driven selling.
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Danaher (DHR): -4.42%
In addition to concerns over sluggish capital investment by pharmaceutical companies in the life sciences field and declining profit margins, the company faced strong selling pressure as the rise in long-term interest rates made its valuation seem high.
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Incyte (INCY): -3.47%
Although there was positive news regarding the approval of a new drug, concerns were raised about excessive revenue dependence on a flagship drug and future delays in new drug development, leading to selling pressure after a major financial institution indicated that short-term stock price gains would be limited.
Future Outlook: Checking the US Employment Report and Focusing on Corporate Financial Strategies
The current US stock market is in a nervous state where two major forces—strong expectations for AI growth and historically high interest rates—are in conflict.
Moving forward, the primary focus will be on confirming the overheating of the labor market and inflationary pressures through the US employment report (non-farm payrolls) to be released this weekend. Additionally, as earnings announcements begin soon, companies will be questioned on what financial strategies they will adopt in a high-interest-rate environment, so I believe it is important to carefully identify high-quality companies that are resilient to changes in the macro environment.
That’s all from me, Hal.
Important Request
This article is created for the purpose of providing information regarding U.S. stocks and does not recommend the buying or selling of any specific securities. Please make final investment decisions based on your own judgment and responsibility.