Treasury yields hit their highest level since 2007 this week, and stocks finished the week higher anyway. On Friday, September 25, 2026, the Dow rose nearly 480 points while the 10-year yield stayed above 5%. Here is why higher yields did not sink stocks this time, and why that could change.

The short answer

Stocks rose on September 25, 2026, because oil prices fell on hopes the Strait of Hormuz could reopen, which eased inflation worries, and because yields were rising alongside strong economic data. The Dow gained 0.93% to 51,828.62 and the S&P 500 gained 0.51% to 7,743.41, even with the 10-year yield near 5.18%.

What happened to stocks and yields on September 25?

The Dow rose 478.64 points, or 0.93%, to 51,828.62. The S&P 500 rose 0.51% to 7,743.41, and the Nasdaq rose 0.48% to 27,068.72, according to market reports, with all three indexes finishing the week higher. Oil fell: West Texas Intermediate crude settled near $92.40 a barrel, down about 2.3%, and Brent fell about 2.1% to $104.32. The Fed's daily data shows the 10-year Treasury yield at 5.18% on September 24, its highest close since 2007, and market reports showed it staying near that level Friday. See what a 5% 10-year Treasury yield means for the yield story.

Why did stocks rise when Treasury yields were surging?

Two things moved in stocks' favor on Friday. The first was oil. Reports that US and Iranian negotiators were discussing a phased deal to reopen the Strait of Hormuz pushed crude lower, and lower oil eases the inflation pressure that has driven the Fed to raise rates. The second was the reason yields were rising. When yields climb because the economy looks strong, as with the flash composite business activity index that hit 58.4 on September 23, its highest in more than five years, investors can expect stronger company profits. That partly offsets the higher cost of borrowing and the competition from a 5% bond.

Yields rising for growth reasons
A strong economy lifts expected profits, which supports stock prices even as bond yields climb.
Yields rising for inflation reasons
Persistent inflation forces the Fed to keep raising rates, which raises borrowing costs and lowers the present value of future profits. This is the pattern behind the September 16 sell-off.

The honest counterargument: are stocks ignoring the bond market?

  • The case that stocks are ignoring a warning: the last time the 10-year yield was this high was 2007. Consumer sentiment fell to a four-month low on Friday as fuel and grocery costs stayed elevated, and CME FedWatch priced roughly 73% odds of another Fed hike on October 28. Stocks fell after the Fed's September 16 hike, and the Dow fell 2.19% on the day of the July 29 Fed hold.
  • The case that Friday was a healthy reaction: yields rose partly for reasons tied to a strong economy, oil eased, and all three major indexes finished the week higher. Stocks also recovered almost all of the September 16 Fed-day drop within a day.
  • The resolution: both can be true. One day's rise shows what the market weighed on that day. It does not show that yields have stopped mattering, and the August PCE report on September 30 could tilt the balance again.

What a beginner should actually do

  1. Do not read one up day as an all-clear. The same week included a sell-off in bonds and a 5% yield.
  2. Keep contributions on schedule. A fixed schedule buys at whatever price shows up. See time in the market beats timing the market.
  3. Put idle cash where it earns 4% or more. See where to keep cash when rates are high.
  4. Watch September 30 and October 28. The August PCE report and the Fed's next decision are the next two events likely to move both stocks and yields.
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The actionable takeaway: Stocks rose on September 25 because oil fell and the economy looked strong, and that outweighed the 5% yield for one day. The relationship between yields and stocks depends on why yields are moving, and a plan built for decades does not need to guess which reason wins next week.

The quick version

  • On September 25, 2026, the Dow rose 0.93% to 51,828.62, the S&P 500 rose 0.51% to 7,743.41, and the Nasdaq rose 0.48% to 27,068.72
  • The 10-year Treasury yield closed at 5.18% on September 24, its highest since 2007, and stayed near that level Friday
  • Oil fell about 2% on hopes of a deal to reopen the Strait of Hormuz
  • Yields rose partly on strong business activity data, which supports profit expectations
  • Consumer sentiment fell to a four-month low, and CME FedWatch priced roughly 73% odds of an October 28 hike
  • Stocks fell on the Fed's September 16 hike, so yield sensitivity has not disappeared
  • The plan for a long-term investor is unchanged: contribute on schedule and keep cash earning interest

Markets weigh many things at once, and on any given day one of them wins. Friday it was oil and growth. A plan that works in every week is the one that does not depend on which.