The 10-year U.S. Treasury yield has dipped below 4% intraday and in recent trading sessions, marking the first time since late November. Reports confirm this milestone today, with the yield trading around 3.97–3.99% in recent updates—its lowest in about three to four months.
This reflects a strong bond rally, with February marking the best monthly performance for Treasuries in a year, driven by factors like investor demand for safe-haven assets amid global risks, softer economic outlooks, and auction demand. This drop in the 10-year yield (a key benchmark) has directly influenced longer-term borrowing costs, including mortgages.
The average 30-year fixed-rate mortgage has fallen below 6% for the first time since 2022 specifically since September 2022. Freddie Mac’s Primary Mortgage Market Survey, shows the average at 5.98% for the week ending then—down from 6.01% the prior week and significantly lower than 6.76% a year ago.
The New York Times, noting it’s the first sub-6% reading in over three years. This is a psychological and practical milestone for the housing market: It could ease affordability pressures and potentially encourage more buyers and sellers to enter the spring buying season.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026).
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab.
However, economists caution it may not spark a full housing boom without increased supply, as home prices remain elevated and other factors like policy uncertainties linger. Note that daily lender-specific rates can vary; some averages show around 6.0–6.04% today, but the key weekly benchmark from Freddie Mac has crossed below 6%.
Treasuries posted their best monthly performance in a year during February. This is largely driven by a “flight to safety” amid uncertainties like trade policy volatility; tariff developments and legal challenges, geopolitical risks, potential economic slowdown signals, and concerns over AI disruption impacting growth stocks.
General Impact on Stocks
Lower Treasury yields typically support equities in several ways: They reduce borrowing costs for companies and consumers, boosting economic activity and corporate profits over time.
They make stocks more attractive relative to fixed-income alternatives; lower “risk-free” rate improves equity valuations, especially for growth-oriented sectors like tech. Falling yields often signal investor caution or expectations of softer growth and Fed easing, which can favor rate-sensitive sectors; real estate, utilities, consumer discretionary.
The mortgage rate drop below 6% could provide a modest tailwind to housing-related stocks and the broader economy by improving affordability, potentially encouraging more home sales and listings in the spring season—though economists note limited boom potential without more housing supply.
However, the relationship isn’t always straightforward. Lower yields can sometimes coincide with risk-off sentiment; fears of recession or disruptive forces like AI reducing corporate earnings growth, pressuring stocks in the short term. On this specific day, the stock market has been under pressure despite the bond rally.
Major indexes opened lower and extended declines, with the Dow Jones Industrial Average dropping significantly (reports of 400–800 points lower at points, or around 1–1.5%). The S&P 500 fell roughly 0.7–1.1% trading around 6,843–6,859 levels. The Nasdaq Composite (tech-heavy) saw sharper losses around 1.4%, weighed down by AI-related fears and weakness in names like Nvidia.
Hotter-than-expected January Producer Price Index (PPI) data, which raised inflation concerns and tempered hopes for aggressive Fed rate cuts. Ongoing “AI scare trade” or fears of disruption to traditional business models and tech valuations. Lingering volatility from trade and tariff uncertainties, which initially fueled the bond rally but also hit equities.
While lower yields and mortgage rates are a supportive factor for stocks in a broader sense potentially aiding a recovery if economic data softens further, today’s market action shows risk aversion dominating—equities sold off as investors rotated into bonds for safety.
February has been choppy and volatile for stocks, with the S&P 500 eyeing a small monthly loss amid these crosscurrents.If you’re investing or tracking this, watch upcoming data and Fed signals, as they could shift the balance between the bond rally’s supportive effects and growth and inflation worries.
Markets remain highly sensitive right now. These moves signal looser financial conditions, with bonds acting as a haven and feeding through to consumer rates. If you’re tracking this for buying, refinancing, or investing, rates remain volatile—check with lenders for personalized quotes.