U.S. Treasury Yields Near 5%, Impact on Stocks, Gold, and Digital Assets

In this round of market volatility, the true protagonist is not any single stock or sector, but the U.S. Treasury yield, which is once again approaching a key level.

On September 1, BiyaPay market data showed that the three major U.S. stock indices continued to weaken. The Dow Jones fell 0.8%, the S&P 500 dropped 0.7%, and the Nasdaq declined 1%, marking the third consecutive trading day of losses for the major indices. Meanwhile, the 10-year U.S. Treasury yield rose to approximately 4.79%, and the 30-year yield neared 5.3%. Rising oil prices, inflation concerns, the upcoming September Fed meeting, and mounting U.S. fiscal pressures have converged, prompting the market to reassess its positioning.

Because it is one of the most critical reference points in global asset pricing. When interest rates rise, stocks, gold, and digital assets are all placed on the same table for comparative evaluation. For U.S. equities, the question is whether their valuations can still hold up; for gold, it’s about how real interest rates and the dollar move; for digital assets like Bitcoin and Ethereum, liquidity and risk appetite become the key factors.

This is why the U.S. Treasury yield approaching 5% cannot be viewed merely as a fluctuation within the bond market alone.

When U.S. Treasuries move, U.S. stocks get nervous—it’s not a new story. But this time, the pressure isn’t just from the Federal Reserve; it’s also from oil prices, budget deficits, the Trump administration’s policy timing, and financing demands driven by AI capital expenditures. What the market truly fears isn’t day-to-day fluctuations, but the possibility that high interest rates may last longer than expected.

As the interconnections between these assets grow stronger, focusing on just one market may cause you to miss important signals. For example, within the BiyaPay app, you can monitor price movements across U.S. stocks, Hong Kong stocks, BTC, ETH, and other assets simultaneously. As a global all-in-one asset allocation platform, BiyaPay covers multiple asset scenarios—including digital assets, U.S. stocks, Hong Kong stocks, and fiat currency exchanges—making it better suited for observing price dynamics and shifts in risk appetite across different markets.

For highly volatile markets like this, what truly matters isn’t fixating on a single price point, but understanding which assets—U.S. Treasuries, the U.S. dollar, tech stocks, gold, or digital assets—are leading the movement and which are following. Doing so makes the price swings in U.S. stocks, gold, or digital assets much clearer in hindsight.

The 10-year U.S. Treasury yield is nearing 4.8%, and the 30-year U.S. Treasury yield is approaching 5.3%; together, these figures reflect not merely short-term interest rate hike expectations, but a repricing of long-term funding costs in the market.

Short-term rates are more closely tied to Federal Reserve policy, while long-term rates are more complex—they reflect inflation, fiscal deficits, government bond supply, growth expectations, and whether long-term investors are willing to absorb the debt. U.S. debt has surpassed $40 trillion, and the pressure from interest payments is growing. As the Treasury continues to issue bonds, the market naturally demands higher yields to compensate for the associated risks.

Here lies Trump’s dilemma. Politically, he naturally wants a strong economy, a stable stock market, and low borrowing costs; but the bond market doesn’t just respond to rhetoric—it looks at inflation data, fiscal trajectories, and long-term creditworthiness. If oil prices continue to rise, inflationary pressures will return; if the fiscal deficit doesn’t ease, the supply pressure on long-term bonds will remain difficult to alleviate. As long as these factors persist, U.S. Treasury yields won’t be easily suppressed.

So the core of this market cycle isn't just about whether the Fed will raise rates or not—it's that capital is beginning to question whether the high-interest-rate environment will last longer than previously anticipated.

Rising U.S. Treasury yields directly pressure stock valuations, particularly for technology stocks, AI stocks, and high-growth sectors, which often incorporate elevated future growth expectations into their prices. As risk-free rates increase, the present value of future cash flows declines, reducing their appeal and lowering the market’s tolerance for high-valued assets.

This is also why the Nasdaq has performed more weakly in this correction. The AI theme has not been disproven—cloud computing, chips, data centers, and energy infrastructure remain key areas of market focus. However, the issue is that the AI supply chain has risen too rapidly, with many companies’ stock prices already pricing in growth expectations for the coming years. Now that U.S. Treasury yields are rising, the market is naturally questioning whether orders can continue to materialize, whether gross margins can be maintained, and whether capital expenditures might strain cash flow.

In simple terms, in a low-interest-rate environment, the market is more willing to pay for future potential; in a high-interest-rate environment, the market prioritizes profits, cash flow, and certainty.

This is also the key for the upcoming U.S. stock market. It’s not that strong earnings always lead to price increases, or that poor performance always causes declines—it’s whether the quality of growth the company delivers can offset the valuation pressure from rising interest rates.

Rising U.S. Treasury yields have a more nuanced impact on gold.

Gold itself does not generate interest. When U.S. Treasury yields rise and the dollar strengthens, the opportunity cost of holding gold increases, typically putting downward pressure on gold prices. This logic underlies gold’s recent pullback from its highs. Public market data shows that on September 1, gold futures briefly fell below $4,400, marking a noticeable correction from the peak reached in late August.

But gold is not merely an interest-rate asset. As long as markets remain concerned about fiscal deficits, geopolitical risks, recurring inflation, and currency credibility, demand for gold as a safe haven and hedge will persist. Therefore, gold is currently facing two opposing forces: one side, higher yields and a strong dollar suppressing prices; the other, fiscal and geopolitical risks providing support.

This means that, in the short term, gold should not be evaluated solely based on the concept of “safe haven.” What truly matters is real interest rates. If nominal rates rise faster than inflation expectations, gold is likely to face pressure; however, if concerns over inflation and fiscal policy continue to escalate, gold may once again attract investor attention.

Digital assets like Bitcoin and Ethereum are also sensitive to U.S. Treasury yields. The reason is straightforward: in short-term trading of digital assets, liquidity and risk appetite carry significant weight.

When U.S. Treasury yields rise and the dollar strengthens, market capital tends to flow toward assets with more certain returns, putting pressure on risk assets. Reports show that on September 1, Bitcoin dropped to around $77,900 in pre-market trading, affected alongside U.S. tech stocks by rising interest rates. This illustrates that during periods of strong macroeconomic pressure, digital assets do not fully decouple from global liquidity conditions.

However, digital assets also have another side. Whenever the market discusses U.S. fiscal deficits, currency credibility, and long-term debt pressures, Bitcoin is once again viewed by some capital as a “macro hedge asset.” In other words, it may be suppressed in the short term by high interest rates, but over the medium to long term, it is repriced in response to fiscal and monetary issues.

This is precisely what makes digital assets so complex today. They are neither purely risky assets nor stable safe-havens, but rather shift narratives depending on market conditions. When interest rates rise, they come under pressure alongside risk assets; when fiscal credit is discussed, they may again attract renewed attention.

The next FOMC meeting will be held on September 15–16. In his Jackson Hole speech, Waller emphasized that the 2% PCE inflation target is a firm goal and that short-term interest rates remain the primary tool for achieving the dual mandate. He also noted that 12-month PCE inflation stands at 3.7%, with a six-month change of 4.1%, indicating that inflation remains above target.

This statement has a direct impact on the market. The Federal Reserve did not provide a clear path, but it made one thing clear to the market: policy cannot easily shift toward easing until inflation returns to the target goal sufficiently quickly.

Next, non-farm payrolls, CPI, PCE, oil prices, and U.S. Treasury auctions will all influence market expectations. If data continues to come in strong or inflationary pressures show no clear signs of easing, U.S. Treasury yields may remain elevated, and valuation pressures on U.S. equities will persist. If economic data weakens significantly, market concerns may shift from inflation to growth.

This is also what makes the current market conditions difficult to assess. Inflation has not been fully resolved, and growth cannot afford to slow significantly; both the Fed and the market are waiting for more evidence.

Therefore, after U.S. Treasury yields approach 5%, the impacts on U.S. stocks, gold, and digital assets are definitively present, though the directions vary.

U.S. equities are most vulnerable to repricing of valuations, particularly in AI and tech growth stocks. Gold faces short-term pressure from high interest rates and a strong dollar, but fiscal, geopolitical, and inflation risks continue to provide support. Digital assets are caught between liquidity pressures and the macro hedging narrative, leading to greater short-term volatility.

Whether Trump can stabilize market sentiment ultimately depends on whether the bond market agrees. As long as long-term U.S. Treasury yields remain elevated, global assets will continue to undergo repeated repricing. U.S. equities will be judged by whether earnings can offset interest rate pressures, gold by real interest rates and safe-haven demand, and digital assets by liquidity and risk appetite.

This market cycle truly reminds us that the previous trading environment, which focused solely on growth narratives, is changing. With the cost of capital rising again, every asset class must answer the same question: Can the expectations priced into its value withstand higher interest rates?