IXIC: Nasdaq Slammed by 1.1% Drop as Yields Surge to Highest Level in 19 Years

Technology stocks retreated from record highs as strong US activity revived rate-hike fears. Oil, Trump-Xi summit and another test of the AI trade now set the agenda.

📉 Record rally meets the bond market

• The Nasdaq Composite IXIC dropped 1.1% Wednesday to 26,936, retreating after two consecutive record closes.
• The S&P 500 lost 0.8%, the Dow shed 352 points and the Russell 2000 fell 1.8%, showing that smaller, rate-sensitive companies absorbed the greatest pressure.
• September’s US composite PMI climbed to 58.4, its highest since July 2021, signalling faster growth but also stronger inflationary pressure. The 10-year Treasury yield consequently surged above 5.1%, reaching its highest level since 2007.
• Early Thursday trading offered little relief. Nasdaq 100 and Dow futures slipped some 0.1% as investors waited for the Trump-Xi meeting. The immediate question is whether Wednesday’s decline was routine profit-taking or the beginning of another valuation adjustment driven by higher bond yields.

🌏 Trump and Xi take centre stage

• Donald Trump and Xi Jinping meet in Washington Thursday, with an extension of the US-China trade truce at the top of the agenda. AI restrictions, semiconductor exports, supply chains and Taiwan could all influence chipmakers and other technology companies with meaningful Chinese exposure.
• Asian markets were cautious before the summit. Japan’s Nikkei jumped more than 1% after reopening from a three-day holiday, but mainland China, Hong Kong and Australia declined. China’s yuan remains near its strongest level in more than three years, reflecting Beijing’s preference for stability around the talks.
• Oil complicated the picture by reversing sharply higher. Brent climbed more than 4% toward $104 after Iran’s president rejected US pressure and attached conditions to reopening the Strait of Hormuz.

💵 Dollar firms as gold and Bitcoin retreat

• The dollar advanced toward a two-month high as traders raised the probability of another Fed increase in October to roughly 70%. EURUSD fell near $1.1380, its lowest level in 10 weeks, as the widening rate advantage made dollar-denominated assets increasingly competitive.
• Gold XAUUSD dropped roughly 1.6% toward $4,290 despite the equity selloff. That apparent contradiction is explained by yields: bullion provides no income, so its appeal weakens when Treasury returns rise. A firmer dollar adds another headwind by making gold more expensive outside the US.
• Bitcoin BTCUSD eased toward $84,000 after briefly reaching $87,400, its highest level since January. The former $82,000 resistance area is now the important support test.
• Among stocks, Meta gained more than 1% on continued enthusiasm for Muse, while Alphabet and Amazon helped pull the broader market lower.
• Costco reports after Thursday’s closing bell, giving traders a fresh reading on consumer spending and inflation. Consensus estimates point to earnings near $6.55 per share on approximately $94.9 billion in revenue — useful numbers for judging whether the strong economy can tolerate still-higher rates.