Real estate falls 2.3% as the 10-year yield closes at 5.11%
Wednesday, September 23, 2026: real estate fund VNQ fell 2.3% after S&P Global’s flash composite PMI jumped to 58.4 and the 10-year Treasury yield closed at 5.11%; energy fund XLE rose 1.0%.
The 10-year Treasury yield closed at 5.11%, a 15-basis-point rise and its highest since July 2007. It was the biggest one-day jump in more than a year. Federal Reserve Governor Michael S. Barr told a Chicago housing summit that further rate increases are likely, hours after S&P Global’s flash survey of private-sector activity rose to 58.4 from 56.0, the strongest reading since July 2021. Barr had put further tightening on the table before noon; the close did the rest.
Ten of eleven sector funds fell. The ranking ran from crude to duration.
Only energy finished higher as duration sold off
- +1.0%
- −0.1%
- −0.3%
- −0.5%
- −0.5%
- −0.6%
- −0.6%
- −0.9%
- −1.5%
- −1.9%
- −2.3%
The S&P 500 fund SPY fell 0.73%. Equal-weight RSP fell 0.68%, so this was not a mega-cap event. The Russell 2000 fund IWM fell 1.80%.
The utilities fund closed at $39.75, 4 cents above its 52-week low. Over the past month it is down 7.3%; the real estate fund is down 6.9%. NextEra Energy, 13% of the utilities fund, fell 2.8%. Southern, Duke Energy and Sempra fell with it. Among the five largest holdings, only Constellation Energy rose. The long-dated Treasury fund TLT fell 1.6%, the same duration move in a different wrapper.
The real estate fund’s drop was broader still. Equinix, American Tower, Prologis and Digital Realty, its four largest positions, together explained less than a third of the 2.3% decline. Volume ran at 1.6 times the typical session.
VNQ posted the worst return on the most elevated volume
Exxon, Chevron and the crude reversal
The U.S. oil fund USO rose 3.3%, reversing five sessions of losses after Iranian President Masoud Pezeshkian vowed not to surrender. Exxon Mobil, Chevron and ConocoPhillips, 48% of the energy fund, rose 1.6%, 1.5% and 2.3% and accounted for 0.81 percentage points of its 1.0% gain. The refiners that had been catching the majors this year, Marathon Petroleum and Valero Energy, each slipped 0.3%. Energy had fallen in Monday’s and Tuesday’s sessions; Wednesday was a producer bounce, not a sector-wide catch-up.
McDonald’s, Alphabet, and the banks
McDonald’s, 4.4% of the consumer discretionary fund, fell 4.8% after Chief Executive Chris Kempczinski told an investor day that high inflation and flat restaurant traffic were likely to persist. Amazon subtracted 0.52 percentage points of the fund’s 1.5% decline. Alphabet’s two share classes subtracted 0.77 percentage points from the communications fund’s 0.88% drop. Meta, the largest holding at 22%, rose 1.0%.
Financials had already fallen 2.0% on Tuesday on more than double average volume. They dropped another 0.46% Wednesday, with Blackstone down 3.8%. Industrials barely moved: Paychex dropped 8.8% after earnings, but it is 0.7% of that fund.
The only sector fund that rose was reversing an oil slide, not collecting on a five-year high in activity.
Frequently asked
Why did real estate fall so much more than the rest of the market?
The 10-year Treasury yield closed at 5.11%, a 15-basis-point rise and its highest since July 2007, and VNQ fell 2.3% on 1.6 times typical volume, with its four largest holdings explaining less than a third of the decline.
What pushed yields up on Wednesday?
S&P Global's flash composite PMI rose to 58.4 from 56.0, the strongest since July 2021, and Fed Governor Michael S. Barr told a Chicago housing summit that further rate increases are likely.
Why was energy the only sector fund that rose?
The U.S. oil fund USO rose 3.3%, reversing five sessions of losses after Iranian President Masoud Pezeshkian vowed not to surrender, and Exxon, Chevron and ConocoPhillips accounted for 0.81 percentage points of XLE's 1.0% gain.
Was this a mega-cap selloff?
No: SPY fell 0.73% and equal-weight RSP fell 0.68%, while the Russell 2000 fund IWM fell 1.80%.