Market Close: Stocks Slide, Rising Yields Can Break Things, Mortgage Rates Rise • 10/7/26

CNBC business news update market close. I'm Jessica Edinger. Wall Street in the red Wednesday, opening Thursday morning after a pullback from stocks from record highs. Bond yields rose. The yield on the 10-year Treasury hit a 24-year high, 5.35%. That was Wednesday morning. By Wednesday afternoon, it pulled back a bit because of decent demand at a government bond auction. The Dow was down 341 points, a half percent, led lower by shares of Caterpillar, which were down more than 5%. The S&P 500 index fell 17 points. The Nasdaq down 61 points on those bond yields that seem to be marching higher. Here's Kai Welz Chem Carson from the Chicago Board Options Exchange on CNBC. >> If it continues, it is going to break things very quickly. What number is going to break things then? What? 5 1/2, 5 and a/4, 6%. Do we know? >> I think we're getting very close. I'd say we're probably 20 basis points away. But it's less about the basis points. It's more about that move. So, it's how fast does it move? If it keeps ticking, ticking, ticking. You're kind of right up against the edge. You're on this cliff. But I'm telling you, we're getting up to that edge. And you can see it happening. At some point we'll wake up one morning and bonds will move 20 basis points along the curve and things will really start to break. >> Investors are talking now about the tarot trade. There are reasonable alternatives to stocks and it's bonds. >> The stock market does not tend to react well to real rates going up because there's an alternative to equities and bonds. There's less risk. So you sell stocks and buy bonds. >> This is aerial investments. Charlie Boinskcoy on CNBC. I have been on your show a lot of times over the last seven years and the whole time I pretty much said avoid bonds. Bonds are not good to have in this inflationary environment. For the first time, I would say bond investors are now finally getting compensated for inflation and can earn a real rate of return. >> A fresh three-year high for mortgage rates on Wednesday as would be home buyers start to walk away from deals if they don't have a decent home loan rate locked in. Mortgage rates loosely follow the yield on the 10-year Treasury. Here's CNBC's Diana Olik. >> Mortgage rates moved even higher again. The average rate on the 30-year fixed rose seven basis points to 7.63% according to Mortgage News Daily. Pending home sales in September dropped a steep 8% year-over-year. That's according to a new report from Zillow. Now, that's a big number, but it should actually come as no surprise because look at the mortgage numbers. Mortgage demand has been tanking steadily over the past month. Weebull shares tanked 19% on Wednesday. CNBC's Aean Jabers with exclusive details on a congressional report that shows the stock trading app may be connected to China. >> The new report alleges that the company, which has 28 million global users, is quietly tied in structural ways to the government of the People's Republic of China, representing a national security threat to American finance. In a statement, the company said in part, "Weble's US business is conducted from its global headquarters in St. Petersburg, Florida, while US customer data is stored in the US, and access to sensitive customer data is controlled by the US." >> The American trucking industry discovered a catch with President Trump's order allowing highway truckers to use off-road, so-called red dye diesel, in their vehicles. Red dye diesel is held to the side for a equipment and construction equipment and is often taxed at a lower rate. The White House, however, did not eliminate excise taxes on that fuel for truckers. It only deferred it. The trucking industry may face a big bill down the road. On Thursday's watch list, we get earnings from PepsiCo. We find out how many people applied for unemployment benefits last week. We also get some new retail sales data. I'm Jessica Edinger. CNBC.