Treasury yields dropped moderately following the ADP jobs report earlier this week. Looking at the 10-year yield, Wednesday’s decline took it back to 4.1%. Overall, the 10-year Treasury Note yield (^TNX) has been in a compressing trading range for the bulk of 2025, leaving the technical outlook neutral until a new extreme is reached, advises Tom Essaye, president of the Sevens Report.
The 10-year yield fell five basis points following the negative ADP jobs report, as the 10-year yield trades much more off growth and inflation prospects than Federal Reserve interest rates. It reacted to the soft employment report because if that is echoed by the government's monthly jobs report (whenever we see it next), that will increase economic slowdown concerns. Investors will move towards the safety of long-dated Treasuries, like they always do (and will again despite US fiscal concerns).
The 4.1% level remains largely Goldilocks from a stock perspective. Yields are low enough not to be a headwind on corporate earnings or economic growth, but not so low they’re being taken as a signal from markets that bond investors are worried about a recession.
That will remain the case as long as the 10-year yield stays generally between 4%-4.5% (closer but not breaking 4% is best, like 4.1%). Falling yields absolutely helped stocks turn around despite the weak data.
Key resistance levels for 10s are: 4.203, 4.324, 4.39. Key support levels are: 4.109, 4.067, 3.99.
