Treasury yields have been under pressure for most of this week, however, amid a general "risk-off" move in global stock markets. All major indexes saw dramatic drops Wednesday on earnings concerns, a sell-off in tech shares and data revealing new home sales have hit their lowest level in nearly two years.
The major U.S. stock indexes are all down sharply this month. European and Asian equities have also dropped sharply in October. On Thursday, however, the Dow Jones Industrial Average gained more than 250 points, while the S&P 500 and Nasdaq Composite both rallied more than 1 percent.
Still, rates are expected to rise in the long term as the Federal Reserve is expected to further tighten monetary policy. The central bank has already hiked the overnight rate three times this year and is forecast to hike once more before year-end.
"The U.S. 10-year Treasury yield has been responsive to the increases in the FOMC's median estimate of the neutral policy rate this year," strategists at MRB Partners said in a note Thursday. "Investors should now expect the Fed's neutral rate views to exert increasing influence on the long end of the U.S. Treasury curve over the coming months."
Yields also rose on Thursday after the U.S. government said weekly jobless claims remained near their lowest levels in more than 45 years. Meanwhile, durable goods orders rose 0.8 percent.
Treasury auctions Wednesday saw the department sell $39 billion worth of five-year notes at a high yield of 2.977 percent. The bid-to-cover ratio, an indicator of demand, hit 2.3, its lowest since february 2017.
Peter Boockvar, chief investment officer of Bleakley Advisory Group, noted the weak demand for Treasurys, writing in a note, "The U.S. Treasury needs to find some new friends because the number of those out there come auction time are becoming few and far between."