U.S. stocks fell on Wednesday, September 23, 2026, as Treasury yields surged to their highest levels since 2007 after flash economic data showed business activity expanding at its fastest pace in five years. The stronger-than-expected reading reinforced bets on additional Federal Reserve rate hikes, sending the S&P 500, Dow and Nasdaq all lower. McDonald's led decliners after an investor day update, while crude oil snapped a five-session losing streak on renewed Middle East supply concerns.
Wall Street Retreats as Yields Hit Multi-Decade Highs
The S&P 500 fell 0.75% to close at 7,706.03, the Dow Jones Industrial Average dropped 352.10 points, or 0.68%, to 51,511.59, and the Nasdaq Composite lost 1.13% to finish at 26,936.04. Small-cap stocks underperformed, with the Russell 2000 among the session's weakest major benchmarks. The move tracked a sharp climb in bond yields, with the 10-year Treasury note touching an intraday high of 5.135%, its highest level since July 2007, while the 5-year yield topped 5% for the first time since 2007 and the more policy-sensitive 2-year yield also climbed to its highest level in two years.
Flash PMI Data Reinforces Rate-Hike Bets
The selloff followed S&P Global's flash September survey, which showed the composite Purchasing Managers' Index climbing to 58.4, a five-year high and well above the 55.3 consensus. The manufacturing gauge jumped to 57 versus 53.7 expected, while services activity rose to 58.7 against a 55.8 forecast, with the report citing strong new orders and multi-year highs in price inflation. Traders raised the odds of a further Fed rate increase in October to roughly 70%, after Fed Governor Michael Barr said in a Chicago speech that further policy adjustments are likely needed, noting inflation remains above the 2% goal and is not clearly trending toward it.
McDonald's Slides on Investor Day, Delayed Growth Targets
McDonald's shares dropped 4.28%, among the steepest declines in the large-cap consumer space, after the company used its investor day to unveil a plan directing $8.5 billion in cumulative support to franchisees through 2036, including roughly $5 billion by 2030 for rent relief and capital contributions. Management also pushed back its target of reaching 50,000 restaurants worldwide from 2027 to 2028, citing cautious consumer spending and rising construction and development costs. Investors focused on the near-term cash flow impact of the support program and on signs of softening U.S. comparable sales.
Oil Snaps Losing Streak on Middle East Supply Concerns
Crude oil ended a five-session losing streak, with Brent crude rising 3.9% to settle at $103.08 a barrel and West Texas Intermediate advancing 1.8% to $92.16. The gains came amid uncertainty over whether a formal agreement to reopen the Strait of Hormuz could be reached, even as Saudi Arabia prepared to restart exports through its East-West pipeline to bypass the contested waterway. The combination of firmer energy prices and rising bond yields added to inflation concerns already stoked by the day's PMI data, keeping pressure on rate-sensitive corners of the market into the close. Oil had fallen for five straight sessions before Wednesday's rebound.
Daily market analysis by BCM Markets.