Wednesday’s 10-year Treasury auction did more work than Thursday’s jobless claims. Demand at the sale eased worries that buyers were stepping back from long-dated debt, and the 10-year yield on the Treasury’s par curve closed Thursday at 5.22%, down six basis points from 5.28%. Stocks still declined. The S&P 500 lost 0.47% to 7,765, the Nasdaq Composite dropped 1.25% to 27,193 and the Dow edged up 0.10% to 51,231.

Did the auction go well?

Yes. The Treasury sold $39 billion of 10-year notes at a high yield of 5.300%, up from 4.834% at the previous sale. The notes priced 1.7 basis points through the when-issued level of 5.317%, so buyers accepted a lower yield than the market had been quoting. The bid-to-cover ratio was 2.77, against a 12-month average near 2.5. Indirect bidders, which include foreign central banks, took 80.3%. Primary dealers were left with 2.5%, far below their usual share of roughly 9%.

That last figure is the useful one. Dealers absorb whatever end investors leave behind, so a tiny dealer share signals real demand rather than balance-sheet strain. It mattered because the 30-year yield had touched its highest level since 2002 on Wednesday, and the fear was that heavy supply would overwhelm buyers. This sale argued against it.

What did jobless claims say?

Initial claims were 197,000 for the week ended 3 October, below the 200,000 forecast. The calendar’s prior figure of 197,000 was revised up to 199,000, so the actual change was a fall of 2,000. The four-week average slipped to 198,000. Continuing claims rose to 1.716 million from 1.699 million and came in above the 1.708 million forecast. The insured unemployment rate stayed at 1.1%.

Few layoffs and slightly slower rehiring describe a labour market that is tight on firing and looser on hiring. Claims near 200,000 give the Fed no reason to drop a second hike from the discussion at its 27 and 28 October meeting.

Why did stocks fall?

Chips. A report that OpenAI’s annualised revenue was about $20 billion lower than earlier estimates hit the AI supply chain. Nvidia and Micron declined, the Philadelphia Semiconductor Index fell as much as 4% during the session, and Arm and Marvell each dropped more than 6% at one point. Lower yields normally help long-duration growth shares, because a smaller discount rate raises the present value of distant earnings. The AI revenue question outweighed that.

The split by size shows it. The Russell 2000 finished flat at 2,794 while the Nasdaq lost more than twice the S&P 500’s percentage. The damage stayed in the names carrying the AI trade.

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