The 10-year yield climbs back to 5.01% two days after the Fed hike
Friday, September 18, 2026. The 10-year Treasury yield rose to 5.01%, reversing Thursday's drop to 4.94% after Wednesday's quarter-point hike.
1-3 year Treasury ETF SHY closed at $81.24, matching its 52-week low, as the 10-year yield climbed to 5.01%. That reversed the drop to 4.94% that followed Wednesday's quarter-point hike. The 2-year yield was 4.76%. Long Treasury ETF TLT fell 0.6%, and both investment-grade and high-yield corporate funds declined.
TLT, LQD and HYG reversed Thursday's post-hike bounce
- TLT · 81.25
- LQD · 104.68
- HYG · 78.55
The Bank of Japan, in a 7-2 vote the same session, raised its overnight call-rate target to around 1.25% from 1%, effective September 24.
Nasdaq-100 ETF QQQ rose 0.6%, a third straight gain. Equal-weight S&P 500 ETF RSP fell 0.5%, matching Russell 2000 ETF IWM. Across U.S.-listed ETFs, 3,184 closed lower and 2,199 closed higher. Two of 11 SPDR sector funds finished up.
Only technology and industrials finished higher
- +0.8%
- +0.4%
- 0.0%
- −0.2%
- −0.2%
- −0.3%
- −0.8%
- −1.0%
- −1.4%
- −1.4%
- −1.4%
The board is a two-speed session: bitcoin and chips higher, the average stock and long bonds lower.
Spot crypto funds all closed higher
Every U.S. spot crypto ETF closed higher, a 69-for-69 session. IBIT gained 6.3% to $46.02; bitcoin itself was at $81,053, up 6.2%, as of 4:25 p.m. ET. Ether was at $2,630, up 7.6%. Crypto-industry equity funds rose a median 7.1%.
Strategy, the largest corporate bitcoin holder, jumped 16.4%. The 2x daily long Strategy funds, including T-REX 2X Long MSTR Daily Target ETF MSTU, closed about 33% higher, in line with twice that move. Inverse 2x Strategy funds fell about as much the other way.
That is a bitcoin-beta event, not a broad equity one. Coinbase rose 11.7% and Robinhood Markets rose 9.1% in the first full session after the Securities and Exchange Commission, on Thursday, issued a five-year Innovation Exemption: a conditional order that lets specified venues trade tokenized U.S.-listed stocks without registering as exchanges. The same window brought a Commodity Futures Trading Commission filing of crypto-market rules for White House review, and a House committee vote advancing a strategic bitcoin-reserve bill. None of those items explains Strategy's gain, or IBIT's. IBIT is still 36% below its 52-week high.
Technology, minus the software
Semiconductor ETF SOXX rose 2.7%. Technology sector ETF XLK gained 0.8%, a third straight advance, and was the only growth sleeve that mattered for the cap-weighted indexes.
Inside QQQ, Micron Technology contributed 0.19 percentage points after a 3.9% rise. Sandisk added 0.12 percentage points on an 11.0% jump. The stock joins the S&P 100 before Monday's open. Nvidia and Advanced Micro Devices filled out the rest of the top of the book. The same session sent expanded software ETF IGV down 1.4%, a 4.0 percentage point gap versus SOXX. Microsoft, Qualcomm, Palo Alto Networks and CrowdStrike all subtracted from XLK.
Communications ETF XLC fell 1.4%, a fourth straight decline. Meta Platforms, a 19.9% weight in that fund, dropped 2.4% and subtracted 0.48 percentage points; Netflix dropped 4.7%. Utilities ETF XLU fell 1.4% to $41.09 and traded at a 52-week low. Materials ETF XLB fell 1.4%, the day's weakest sector fund, with Nucor down 6.3% after it guided third-quarter earnings to $5.55 to $5.65 a share following Thursday's close.
SOXX is still 19% below its 52-week high.
Heavy volume and a European selloff
Friday was the quarterly expiration of stock options, index options and index futures. The Nasdaq-100 also reset constituent weights at the close, with the new weights effective at Monday's open. SPY, QQQ and IWM each traded their heaviest volume of the prior 20 sessions. SPY turned over 1.58 times its 20-session median. Breadth still ran negative.
iShares Core MSCI Europe ETF IEUR fell 0.8% on $652 million of turnover, more than 18 times its own 20-session median. The DAX, CAC 40 and FTSE 100 each dropped about 1.5%. Volkswagen cut its outlook after an $11.5 billion one-off charge.
Berkshire Hathaway said Warren Buffett will become chairman emeritus, remaining on the board, and that Howard Buffett will become chairman. The company an S&P 500 fund already holds did not change.
The Federal Reserve reported that manufacturing output fell 0.3% in August after seven monthly increases; total industrial production was unchanged. Xenon Pharmaceuticals sank 31% after pausing new-patient enrollment in Phase 3 epilepsy trials, the largest single drag on IWM.
The VIX settled at 14.83, down 4.0%. Wednesday's hike lifted the median year-end funds-rate projection to 4.1%. That projection now sits against a 10-year yield back above 5% and against utilities and short Treasurys at 52-week lows.
Frequently asked
Why did yields rise if the Fed just hiked?
The hike initially sent the 10-year down to 4.94%, but that move reversed Friday and the yield climbed back to 5.01%, with the 2-year at 4.76%.
What drove the crypto rally?
Bitcoin rose 6.2% and every spot crypto fund gained, and the article says the day's regulatory news, an SEC innovation exemption, a CFTC filing and a House committee vote, does not explain the size of moves like Strategy's 16.4% jump.
Was technology broadly strong?
No: semiconductors rose 2.7% while expanded software fell 1.4%, a four-percentage-point gap, and Microsoft, Qualcomm, Palo Alto Networks and CrowdStrike all subtracted from the tech sector fund.
Why was volume so heavy?
Friday was the quarterly expiration of stock options, index options and index futures, and the Nasdaq-100 reset constituent weights at the close.