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Nasdaq record close, Treasury 10Y at 5.31% — highest since 2002; India Tuesday setup
US stocks shrugged off rising yields on Monday: Nasdaq Composite +1.05% to a record 27,477.31, S&P 500 +0.66% to 7,773.95. The Treasury 10Y CMT rose to 5.31% — its highest close since May 2002. Oil eased, WTI ~$89. In India, Nifty 50 closed +0.60% at 22,555.75 on reopen day; FPIs sold a net ₹4,699 crore and DIIs bought ₹5,182 crore. RBI's MPC meets for a second day while the central bank runs a ₹2.5 lakh crore liquidity-draining auction this morning.
60-sec
US cash Monday (5 Oct):
| Index | Close | Change |
|---|---|---|
| Nasdaq Composite | 27,477.31 | +286.45 (+1.05%) — record close |
| S&P 500 | 7,773.95 | +51.23 (+0.66%) |
| Dow Jones Industrial Average | 51,267.90 | +90.94 (+0.18%) |
| Russell 2000 | 2,847.14 | +14.24 (+0.50%) |
Yields — official close (Treasury CMT, 5 Oct): 2Y 4.84% (+1 bp) · 10Y 5.31% (+3 bp) · 30Y 5.66% (+3 bp). The 10Y is now at its highest daily close since 14 May 2002 on Treasury’s own series.
US data: ISM Services PMI 54.9 in September (August 55.4) — the 27th straight month of expansion. Prices index 74.0, the highest since July 2022.
India Monday close (NSE, 5 Oct): Nifty 50 22,555.75 (+133.80 / +0.60%) · Nifty Bank 54,714.10 (+0.48%) · Nifty Midcap 100 +0.67% · Nifty IT flat (−0.01%) · India VIX 14.67 (+1.47%). FPIs net sold ₹4,699.14 crore; DIIs net bought ₹5,181.62 crore (provisional).
Oil (indicative — front-month feed, not a settlement price): WTI ~$89.43 Mon (−1.8%), Brent ~$100.32 (−1.9%).
Takeaway: Tech-led buying beat the bond market for a second straight session — but the 10Y is still climbing, now at a 24-year high. India opens Tuesday with RBI draining cash and a policy decision a day away. Not investment advice.
Analysis
Stocks up, yields up — again
Monday repeated Friday’s pattern. The Nasdaq cleared its 22 Sep record close (27,244.28) and finished at 27,477.31. The S&P 500 is now about 0.3% below its 13 Aug record of 7,798.99 (Capital Chronicle arithmetic from index closes). The Dow lagged at +0.18%.
The bond market did not join the rally. Official Treasury CMT rows:
| Tenor | CMT 5 Oct | CMT 2 Oct | Δ | 2 Jan 2026 |
|---|---|---|---|---|
| 2Y | 4.84% | 4.83% | +1 bp | — |
| 10Y | 5.31% | 5.28% | +3 bp | 4.19% |
| 30Y | 5.66% | 5.63% | +3 bp | — |
The 10Y has risen about 112 bp since the first trading day of 2026. On Treasury’s daily series, the last close at or above 5.31% was 14 May 2002. Our read: stocks are pricing a growing economy, while bonds are pricing sticky inflation and heavy supply — the ISM prices index at 74.0 supports the bond-market side of that argument.
ISM: still growing, prices hot
The September ISM Services report showed the business activity index at 56.5 (from 61.7), new orders 59.8 (from 60.9), and employment back above 50 at 50.1 (from 47.8). That squares with Friday’s weak payrolls print only loosely: services hiring is no longer shrinking, but it is barely growing (Friday’s jobs story).
India: reopen day held up
India’s first session after the Gandhi Jayanti break closed higher. Nifty 50 gained 133.80 points to 22,555.75 with 31 advances and 18 declines among its constituents. Midcaps (+0.67%) kept pace; IT was flat. The Sensex closed near 72,382 (indicative — exchange-feed level).
The money split was clear: foreign portfolio investors sold a net ₹4,699.14 crore in the cash market while domestic institutions bought ₹5,181.62 crore (NSE provisional data, all exchanges).
RBI: draining cash before the decision
- Monday: RBI ran two overnight Variable Rate Reverse Repo (VRRR) auctions. The first drew ₹2,10,688 crore of offers for a notified ₹2,00,000 crore; RBI accepted ₹2,00,050 crore at 5.24%. The second drew only ₹10,142 crore against ₹50,000 crore notified — all accepted at 5.24%. Total absorbed: ₹2,10,192 crore.
- Why: RBI’s money-market statement for Sat 3 Oct showed net liquidity absorbed of about ₹5.17 lakh crore — that is, the banking system was in surplus by that amount. Overnight call money averaged 4.94% that day, below the 5.25% repo rate.
- Tuesday: a larger one-day VRRR for ₹2,50,000 crore runs 9:30–10:00 IST, reversing Wed 7 Oct — the MPC decision day.
- Bond supply: the government will re-issue ₹36,000 crore of dated securities on Fri 9 Oct (7.06% GS 2041 ₹23,000 crore · 7.43% GS 2076 ₹13,000 crore); when-issued trading opens today.
Large banks’ foreign-currency FCNR(B) inflows are part of this liquidity story (today’s FCNR tally).
Rupee
No fresh FBIL reference rate was published on its public page for 5 Oct. USD/INR market feeds showed about 96.3 early Tuesday (indicative only).
What to watch next (sourced clocks only)
- India cash open 9:15 IST; RBI VRRR window 9:30–10:00 IST
- RBI MPC decision Wed 7 Oct (MPC preview)
- G-sec auction Fri 9 Oct
- US 10Y CMT above or below 5.31%
Sources
- U.S. Department of the Treasury — Daily Treasury Par Yield Curve Rates, 2026 (5 Oct: 2Y 4.84%, 10Y 5.31%, 30Y 5.66%; 2 Jan: 10Y 4.19%) and historical series 2001–2025 (last 10Y close ≥5.31%: 14 May 2002) — https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2026
- Institute for Supply Management — September 2026 Services ISM Report On Business (issued 5 Oct 2026): Services PMI 54.9, business activity 56.5, new orders 59.8, employment 50.1, prices 74.0 — https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/services/september/
- US index closes (5 Oct 2026): S&P 500 7,773.95 — https://www.spglobal.com/spdji/en/indices/equity/sp-500/ · Dow Jones Industrial Average 51,267.90 — https://www.spglobal.com/spdji/en/indices/equity/dow-jones-industrial-average/ · Nasdaq Composite 27,477.31 — https://www.nasdaq.com/market-activity/index/comp · Russell 2000 2,847.14
- NSE — index closing data, 5 Oct 2026 (Nifty 50, Nifty Bank, Nifty Midcap 100, Nifty IT, India VIX) — https://www.nseindia.com/market-data/live-market-indices
- NSE — FII/FPI and DII trading activity (provisional), 5 Oct 2026 — https://www.nseindia.com/reports/fii-dii
- Reserve Bank of India — Result of the Overnight VRRR auction held on 5 Oct 2026 (PR 2026-2027/1243) — https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63721
- Reserve Bank of India — Result of the Second Overnight VRRR auction held on 5 Oct 2026 (PR 2026-2027/1248) — https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63726
- Reserve Bank of India — Money Market Operations as on 3 Oct 2026 (PR 2026-2027/1246) — https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63724
- Reserve Bank of India — RBI to conduct Overnight VRRR auction on 6 Oct 2026, ₹2,50,000 crore (PR 2026-2027/1255) — https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63733
- Reserve Bank of India — Auction of Government of India Dated Securities, 9 Oct 2026 — https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=63730
- Indicative only: WTI/Brent front-month, USD/INR and Sensex levels from market data feeds — not settlement or reference prints
- Capital Chronicle: us-september-payrolls-29k-cmt-528-india-reopen-october-5 · rbi-mpc-october-2026-meeting-begins-repo-525-october-5 · kotak-indusind-idfc-first-fcnr-deposits-35-billion-rbi-liquidity-october-6
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