Strong Data, Stronger Tech: Rates Drift Higher

[Andrew Postell]

Interest rates are edging modestly higher today as strong U.S. economic data and a rebound in tech risk appetite take some pressure off bonds. Stocks pushed higher, led by megacap tech, as investors grew more comfortable that the AI‑driven selloff may be finding a floor. Nearly 350 S&P 500 names advanced, with Nvidia and software stocks leading, reinforcing a “risk back on” tone that’s weighing on Treasurys.

The macro data supported that shift. January industrial production posted its strongest gain in nearly a year, business equipment orders surprised to the upside, and housing starts climbed to a five‑month high at +2.8%— all signaling that growth remains resilient. Against that backdrop, the dollar strengthened and the 10‑year Treasury yield moved up toward 4.08%, marking a second straight advance as investors reassess how quickly the Fed can resume rate cuts.

With the Fed minutes due later today, the question isn’t whether the economy is slowing — it’s how much evidence policymakers need before restarting the easing cycle (cutting rates). For now, solid growth, stabilizing tech sentiment, and firm capital investment are enough to keep yields biased slightly higher, even as markets remain data‑dependent heading into PCE later this week.

Mortgage pricing is a little softer this morning.

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