Treasury Yields Slip as Election Fears Send Stock Futures Sliding

Money sprinted into Treasuries as election night turned ugly for equities. The benchmark 10-year note yield dropped nearly 5 basis points, leaving it at 4.902%. The 2-year yield shed 6 basis points, landing at 4.55%, and CNBC reported the 30-year bond yield slid 5.29%. Yields and prices move in opposite directions, so that retreat in yields is a bond rally.

The trigger was politics. According to a CNBC Election Desk projection, Democrats are expected to win the House. The Senate remains up for grabs, but Democrats have already flipped a seat in North Carolina, where former Gov. Roy Cooper is projected to win.

Equity futures took the punch. Contracts tied to the S&P 500 dropped 1.1%, and Nasdaq-100 futures slid 2% as results came in. The selling was heaviest in AI-related shares, the group that has powered the bull market, on fears that a Democratic sweep would put the brakes on the data center buildout.

So traders did the old-fashioned thing: they crowded into the safest paper they could find. Shorter-dated notes drew the biggest bid, with the 2-year giving back more ground than the 10-year, a sign investors are hedging near-term Washington risk rather than betting on a long-run shift in the economy.

What happens next hinges on the Senate, which has not been called. Until that picture sharpens, expect bonds to stay the parking spot of choice and rate-sensitive corners of the stock market to keep twitching.