US Treasuries fell as money rotated back into technology heavyweights, softening the bid for safety. Yields climbed by about 6 to 8 basis points across the curve, with traders reviving wagers on additional Federal Reserve increases next year and continuing to pencil in a 0.25 point rise in December.
After its sharpest drop in more than a year, the Nasdaq 100 Index rebounded about 2% Monday, with enthusiasm for artificial intelligence plays resurfacing. Last week's drop was the worst since April 2025 and briefly pushed investors toward Treasuries to cushion stock drawdowns. Fresh corporate bond supply also drew money from government debt, said Gennadiy Goldberg, who runs US interest-rates strategy at TD Securities.
A surprise bond sale from Walmart Inc. hit the calendar alongside Kimberly-Clark Corp.'s expected deal to help fund its Kenvue Inc. acquisition slated for Monday. To complete the deal, Kimberly-Clark must line up nearly $7 billion in cash, while Walmart is borrowing to fund expansion. "Market positioning is still quite tenuous given the recent whipsaw selloff and rally, which is keeping a lot of investors away, exacerbating the day-to-day moves," said Gennadiy Goldberg.
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Another drag came from Europe, where most government bond yields rose. France led the advance, with its 10-year yield up to 14 basis points higher after weekend cost-of-living riots. With one of the euro area's largest budget deficits, France's sovereign rating is in Moody's sights on Friday. In plain English: with Treasury yields still near multiyear highs reached over the past month, income is better and cushions against broader equity pullbacks are thicker, but swings can stay sharp when tech rallies and corporate issuance picks up.
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