Rising long-term yields pressured growth

January 2, 2026 at 21:00 UTC

5 min read

30-year U.S. Treasury yield chart with Nasdaq and energy sector performance, highlighting yield impact

Key Points

The 30-year U.S. Treasury yield climbed to 4.88%, tightening global yield curves and weighing on U.S. growth-sensitive equities, contributing to mixed U.S. index performance.
France's stronger December manufacturing PMI has supported French cyclicals, while Germany's weaker HCOB PMI has increased downside risk to euro-area growth.
Gains in Chinese ADRs, notably Baidu's double-digit rise, and a firmer yuan have driven a strong jump in the Hang Seng and lifted regional equities.
Energy and cyclicals led sector gains while communication services and consumer discretionary lagged; DHT's VLCC delivery and several deal closings have supported selective stock movers.

Global Market Summary

US equities were mixed as the Nasdaq Composite (^IXIC) closed down 0.08% as rising long-term U.S. Treasury yields (30-year at 4.88%) pressured growth names. European benchmarks were modestly higher with the CAC 40 (FRA40) up 0.56%, the FTSE 100 (UKX) up 0.20% and the DAX (DAX) up 0.20% after a stronger French manufacturing PMI offset a weaker German print. Hong Kong's Hang Seng (HSI) jumped 2.76% as gains in Chinese ADRs such as Baidu (BIDU +15.22%) and a firmer yuan supported regional equities.

Top Movers

Sectors: Energy (XLE +2.02%) led gains, followed by Basic Materials (XLB +1.64%) and Industrials (XLI +1.67%); Communication Services (XLC -0.70%) and Consumer Discretionary (XLY -0.98%) lagged. Top stock movers included FLNC (+16.13%), SNDK (+15.49%) and BIDU (+15.22%). Biggest decliners were PAY (-9.78%), KVYO (-9.49%) and LQDA (-9.21%).

Macro highlights

Final December PMIs diverged in Europe: France's S&P Global manufacturing PMI rose to 50.7, supporting French cyclicals, while Germany's HCOB PMI fell to 47.0, increasing downside risk to euro-area growth. In fixed income, the 30-year U.S. Treasury yield climbed to 4.88% and Japan's 2-year yield reached 1.18%, tightening global yield curves and weighing on U.S. growth-sensitive equities. Singapore's Q4 GDP growth slowed to 1.9% QoQ from 2.4%, a softer print for the start of 2026.

News that moved markets

DHT Holdings took delivery of the VLCC newbuilding DHT Antelope and said it is the first of four fully funded VLCC deliveries that will enter the spot market, a move that could boost near-term spot-rate exposure and revenue for freight-sensitive names. Market posts also flagged the 30-year U.S. Treasury yield rising to 4.88% and President Trump's public comments defending tariffs, both of which affected risk sentiment and positioning during the session. Multiple completed transactions closed on January 2: SHINE completed its acquisition of Lantheus's SPECT business; Allison Transmission closed its acquisition of Dana Incorporated's Off-Highway Drive & Motion Systems business and Dana completed the corresponding sale. Other closings included Bank First Corporation's acquisition of Centre 1 Bancorp, Gryphon Investors' sale of 3Cloud to Cognizant, and additional completed deals involving Ecovyst, Skyward Specialty, GigaCloud and Astec.

Upcoming session watchlist

US ISM Manufacturing PMI (DEC) — consensus 48.3 vs 48.2 prior, Jan 05, 03:00 PM | Signals near-term manufacturing activity and demand, indicating growth and inflationary pressure.
GB BoE Consumer Credit (NOV) — vs £1.119B prior, Jan 05, 09:30 AM | Indicates household credit growth and borrowing demand, informing consumer spending outlook.
GB Mortgage Approvals (NOV) — vs 65.02K prior, Jan 05, 09:30 AM | Tracks mortgage lending and housing demand, indicating mortgage credit and housing activity.

Key Takeaways

U.S. equities were mixed: the Nasdaq closed down as the 30-year U.S. Treasury yield climbed to 4.88%, pressuring growth names while other U.S. benchmarks were less affected.
European benchmarks were modestly higher as a stronger French manufacturing PMI offset a weaker German print, with France's cyclicals outperforming while other indices rose modestly.
Energy led gains while communication services and consumer discretionary lagged. FLNC, SNDK and Baidu jumped; PAY, KVYO and LQDA fell. Multiple deals closed and DHT took delivery of a VLCC.