Update: US Equity Indexes Fall After Strong Treasury Auction, Tightening Lean in Fed's September Minutes

03:53 PM EDT, 10/07/2026 (MT Newswires) -- (Updates with index/price moves, macroeconomic data, and company/geopolitical news from the first paragraph.) US equity indexes fell after a Treasury auction of 10-year government bonds showed demand improved from a month ago and the Federal Reserve's September meeting minutes revealed a bias toward policy tightening. The Nasdaq Composite fell 0.3% to 27,523.4, the S&P 500 declined 0.2% to 7,799.9, and the Dow Jones Industrial Average slid 0.6% to 51,192.7 ahead of Wednesday's close. After raising the target range for the federal funds rate at its Sept. 15-16 meeting, most Federal Open Market Committee participants judged that another increase would likely be appropriate by year-end, minutes released Wednesday showed. Many participants said a higher policy path would be prudent on risk-management grounds, providing insurance against inflation remaining above target. Several participants viewed the current policy rate as "not restrictive or only mildly restrictive." The probability of the Federal Reserve raising its target rate by 25 basis points in October further slipped to 17% in the final leg of trading, down from 38% a week ago, according to the FedWatch tool. The remaining 83% likelihood is that rates will remain unchanged at the 3.75% to 4.00% range. The US Treasury's 10-year auction hit a high yield of 5.30%, up from about 4.83% in the previous auction. The bid-to-cover ratio rose to 2.77 from 2.71 in the previous auction, implying stronger demand. Wednesday's auction followed Tuesday's $58 billion in 3-year notes sales and preceded a $22 billion 30-year bond offering due Thursday. Treasury yields traded mixed after the auction results. The 30-year rate was still up three basis points to 5.67%, after touching 5.73% earlier in the session, the highest since 2002. The 10-year yield held to gains of 1.7 basis points to 5.29%, after hitting 5.37% intraday, the strongest level since 2002. The 2-year yield fell 2.1 basis points to 4.77%. In economic news, US consumers' one-year-ahead inflation outlook reached the highest in more than three years in September, while labor market expectations "mostly improved," a survey by the Federal Reserve Bank of New York showed Wednesday. Median one-year inflation expectations rose by 0.3 percentage points to 3.9% last month, the highest reading since May 2023, the Fed branch said. The three-year outlook edged up to 3.3% from 3.2%, while the five-year inflation views were unchanged at 3%, according to the survey. Meanwhile, the front-month US West Texas Intermediate crude oil contract fell 0.7% to $88.80 per barrel, while global benchmark Brent rose 0.4% to $100.94 per barrel.