Why It Matters
Issue 7 · Monday 28 September 2026
Bond yields jump again, and equities shrug it off
The US 10-year Treasury yield rose to 5.17% this week, its highest since 2007, while stocks in New York and London still closed higher. That gap between bond markets and equity markets is the real story.
The week in figures
Each figure as at its own date · sources below
Equities
US · UK · India
- The S&P 500 closed the week at 7,743.41 and the Nasdaq Composite at 27,068.72, both up on the week, with Meta shares roughly 12% higher after the launch of its AI agent Muse.1 The rally came despite, not because of, the bond market moves described below.
- The FTSE 100 closed at 10,695.25 on Friday, up 0.14% on the day and about 0.3% on the week, with banks and miners offsetting weakness in oil majors as crude prices fell.2 UK consumer confidence rose for a third straight month, though it remains negative.
- India's Nifty 50 closed at 23,140.50 and the Sensex at 73,895.74, both lower for a seventh consecutive week, the longest losing streak since 2020, as foreign investors continued selling into the rise in global bond yields and oil prices.3
Rates & Fixed Income
UK · US
- The US 10-year Treasury yield closed the week at 5.17%, its highest since 2007, and the 2-year yield closed at 4.81%. Both moves came after the Federal Reserve's rate rise earlier in September and hawkish comments this week from a Fed governor that further increases will likely be needed.
- The UK 10-year gilt yield closed at 5.29%. Bank of England policymakers, having already raised rates once this month, spent the week signalling they are moving closer to doing so again if energy prices keep pushing inflation higher. The Bank's own market-liaison group noted this week that investors now expect Bank Rate to rise further, a view the Bank did not contradict.4
- Bank Rate stands at 3.75%, the Fed funds target at 3.75-4.00% and the ECB refinancing rate at 2.65%, all unchanged this week because none of the three met, having already acted earlier in September.
Commodities
Oil & gas · Gold
- Brent crude fell 4.0% on the week to $114.89 a barrel and WTI crude fell 5.0% to $96.41, both easing on reports that Iran had asked the United States to revisit a memorandum that could reopen the Strait of Hormuz.5
- Henry Hub natural gas fell 2.4% to $2.90 per million BTU.6
- Gold fell 2.0% on the week to $4,261.05 an ounce, a rare pullback for a metal that has otherwise moved with, rather than against, the rise in bond yields this year.7
Currencies
GBP
- Sterling fell against the dollar over the week to close at 1.3252 and eased against the euro to 1.1622, moves that sit more comfortably with a market pricing further Bank of England tightening than with one expecting the pound to be rewarded for it.
What I'm Watching
The week ahead
- The Reserve Bank of India's monetary policy committee meets from 5 to 7 October, its first decision after four consecutive holds, and will be read for its view on oil prices and the rupee as much as on inflation.8
- The Bank of England's next decision, on 5 November, now carries more weight after a week of policymakers signalling discomfort with holding rates where they are.9
- The European Central Bank's next meeting falls on 29 October, and its staff projections already show inflation running above target into 2027, which sets a high bar for another pause.10
Sources
- Stock market news for Sept. 25, 2026
- FTSE 100 edges up as oil fall offsets bond worry
- Weekly market wrap: NIFTY50, SENSEX falls for 7th consecutive week; Infosys, Bharti Airtel, others drag losses
- Minutes of the Market Participants Group meeting – 24 September 2026 | Bank of England – the UK's central bank
- WTI crude — EIA, 2026-09-22
- Henry Hub natural gas — EIA, 2026-09-22
- Gold — LBMA, 2026-09-25
- RBI MPC Meeting Schedule for FY 2026-27 | 5paisa
- Next Bank of England Meeting | 5 November — Mortgage One
- Monetary policy decisions
Market Snapshot figures from Bank of England, ECB Data Portal, New York Fed, US Treasury, EIA and ONS. Contains public sector information licensed under the Open Government Licence v3.0.
Abhineet Rai
Founder · Wealth Adviser, Rai Wealth Management
Abhineet founded Rai Wealth Management after more than two decades in banking, including spells as a Director in Private Banking at Credit Suisse, Bank of Singapore and HSBC Private Bank in London. He trained at the National Defence Academy in India before taking an MBA, and holds certifications in Investment Planning, Securities & Derivatives, and Regulated Mortgage advice.
- 20+ years in banking
- Credit Suisse · Bank of Singapore · HSBC
- NDA-trained, then MBA
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Your capital is at risk. The value of investments and any income from them can fall as well as rise, and you may get back less than you originally invested. Past performance is not a reliable indicator of future results. Tax treatment depends on your individual circumstances and may change.
This is not advice. Why It Matters is general market commentary. It contains no recommendation and takes no account of your circumstances, objectives or holdings. Nothing in it should be read as a suggestion to buy, sell or hold any investment. See the full risk warnings and disclaimer.
How this issue was prepared. The research and first draft were produced with AI assistance from primary-source data. Every figure was checked against its source before publication, and the commentary and the whole issue were reviewed, edited and approved by Abhineet Rai before it was sent.
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Equities are pricing a soft landing that the bond market has stopped believing in
The US 10-year Treasury yield reached 5.17%, a level last seen in 2007, and the 2-year yield rose to 4.81%, both according to the US Treasury. The S&P 500 rose over the same week and closed at 7,743.41 on Friday.1 Two markets looking at the same set of facts, an economy still running above-target inflation and a Federal Reserve that raised rates rather than cut them this month, have reached opposite conclusions about what that means for the price of risk.
The explanation usually offered is that equities are pricing growth and bonds are pricing inflation, and both can be right at once. I think that is too tidy. What is happening in equities looks more like a market that has decided the rate story is over, three central banks having already moved this month, and that whatever comes next is priced. Meta's shares were still up around 12% on the week on enthusiasm for its new AI product, and that kind of move does not happen in a market that is worried about the cost of money. The bond market, by contrast, is behaving as though the story is not over at all. A Federal Reserve governor said this week that further increases will likely be needed, and Bank of England policymakers made similar noises about energy prices making it harder to hold rates where they are. That is a market still repricing, not one that has settled.
None of this tells me which market is wrong, and I would resist the temptation to assume it must be equities simply because the move there is more comfortable to hold. What it does tell me is that the calm in stock prices is not evidence that the rate cycle has finished doing its work. It may simply mean that bond markets, which reprice every day on every data point, are further ahead of the news than equity markets, which reprice on conviction and can lag by weeks. A portfolio built to survive higher-for-longer rates does not need this week to change anything. A portfolio built on the assumption that the hiking cycle was a one-off event in September has more thinking to do than the equity market's own behaviour would suggest.
Abhineet RaiFounder · Wealth Adviser, Rai Wealth Management