Key Highlights

● Lowe's touched 52-week lows before bouncing as the 10-year Treasury Yield hit its highest close since 2002.

● Homebuilder Lennar and McDonald's also touched 52-week lows the same day.

● Real estate and consumer staples have each fallen for eight straight weeks.

Lowe's shares touched 52-week lows on Monday before bouncing, as a climb in long-term Treasury yields pressured housing-linked stocks.

A trip to the lows

Lowe's (NYSE:LOW) touched 52-week lows on Monday, Oct. 5, before bouncing. The home-improvement retailer had no company-specific news, announcement or filing on the day.

Instead, the pressure came from the bond market. The 10-year Treasury yield climbed to its highest close since 2002, and long-term yields across the curve hit 52-week highs. Rate-sensitive stocks, especially those tied to housing, felt the strain.

Why yields matter for Lowe's

Lowe's sells lumber, tools, appliances and other supplies for homeowners and contractors. Its Business is closely tied to the housing market. When people buy homes, they often renovate, repair and furnish them. When Mortgage rates are high, fewer homes change hands, and some homeowners put off big projects.

Mortgage rates move with long-term Treasury yields, and they remain at their highest levels in years. Higher rates also make it more expensive for homeowners to borrow against their homes to pay for renovations.

Lowe's was not alone at the lows. Homebuilder Lennar (NYSE:LEN) sank to 52-week lows, a session after a report published Oct. 2 by short seller Hunterbrook. McDonald's (NYSE:MCD) also touched 52-week lows before bouncing. Real estate and consumer staples have each fallen for eight straight weeks.

Big tech shrugs off the rate spike

The rest of the market looked very different. The S&P 500 rose 51.23 points to 7,773.95, just shy of its summer record. The Nasdaq Composite climbed 286.45 points to a record close of 27,477.31, and the Dow Jones Industrial Average added 90.94 points to 51,267.90.

That split was the story of the day. Large technology and artificial-intelligence stocks pushed higher even as yields rose, while companies that depend on borrowing and consumer spending struggled.

Daniela Hathorn of Capital.com captured the tension: "growth stocks are rallying because Fed expectations have softened, while the Risk-Free Rate against which those valuations are judged remains exceptionally high."

Breadth inside the S&P 500 was positive, with advancers outnumbering decliners by 1.7-to-1. But the index also logged 20 new lows against 13 new highs, a sign that pockets of the market, including housing-linked names, remained under strain.

Weak jobs, hot prices

Why are long-term yields rising even as the jobs market cools? Friday's report showed employers added only 29,000 jobs in September, which cut bets on a Federal Reserve rate hike in October. Traders now see roughly a one-in-four or smaller chance of an October hike, down from better than even a week ago.

But Inflation worries have not gone away. The ISM services prices-paid index rose to its highest level since July 2022. Oil remains elevated, with Brent settling at $100.32 a barrel even after slipping on the day. Heavy federal borrowing also weighs on bonds: the government's Deficit for fiscal 2026 was about $2 trillion, according to the Committee for a Responsible Federal Budget.

"All else being equal, investors are content with the underlying performance of the real economy and share the Fed's inflation angst," said Ian Lyngen, head of US rates strategy at BMO Capital Markets.

What to watch

The Federal Reserve releases minutes of its September meeting on Wednesday, Oct. 7, at 2pm ET, which could move Treasury yields. The Fed's next policy meeting is Oct. 27-28. For Lowe's, investors will watch the direction of mortgage rates and the company's next Quarterly Report for signs of how homeowners are spending on projects. Big bank Earnings from Oct. 13 will also offer clues on consumer borrowing.