Wall Street’s Weekend Watch: Soaring Treasury Yields Shake Dividends, While Tech & Pharma Surge

As Wall Street looks to close out the week and prepare for the next trading session, a dramatic surge in Treasury yields is dominating headlines, creating a turbulent environment for dividend stocks. However, not all sectors are feeling the pinch, with specific technology and pharmaceutical giants hitting impressive new highs.

Treasury Yields Climb to Multi-Year Highs, Pressuring Dividend Stocks

Thursday saw the 10-year Treasury yield escalate to a staggering 5.225%, a level not witnessed since June 2007. This significant climb has put immense pressure on dividend-paying exchange-traded funds (ETFs) and S&P 500 stalwarts.

• The First Trust SMID Cap Rising Dividend Achievers ETF (SDVY) has declined 9% from its 52-week peak and 6.5% over the past month.
• The State Street SPDR S & P Dividend ETF (SDY) is down 7.7% from its July high and has shed 7% in the last month.

S&P 500 Dividend Payers Under Scrutiny

According to the CNBC Stock Screener, several prominent S&P 500 companies with market caps exceeding $10 billion, known for their dividends, are facing considerable headwinds:

• VICI Properties: Boasting a 7.78% dividend yield, its stock is down 13% in a month.
• UPS: With a 7.13% dividend yield, the stock has fallen 11.7% in September.
• General Mills: Offers a 7.01% dividend yield but saw its stock decline 15.5% in September.
• Kraft Heinz: Pays 6.71%, with its stock down 7% this month.
• Edison International: Its 6.68% yield comes as the stock plunged almost 30% in a month.

Consumer Staples Hit New Lows

Two major consumer staple stocks, Clorox and Hormel Foods, have recently plummeted to new lows not seen since 2013. Clorox is now 36% off its February high, while Hormel has dropped 25% from its June high.

Tech and Pharma Defy Gravity, Reaching New Peaks

In stark contrast to the broader market pressures, several key players in the technology and pharmaceutical sectors are celebrating significant milestones:

• Moderna: Reached levels not seen since January 2023, surging an impressive 775% from its November low.
• Meta Platforms: Hit highs last observed in recent years, with shares climbing 50% from their March low.

Cybersecurity Firms Achieve All-Time Highs

The cybersecurity segment continues its robust performance, with several companies marking all-time highs:

• Advanced Micro Devices (AMD): Achieved a new high, soaring 306% from its past low.
• CrowdStrike: Also recorded a new high, up 203% from its February low.
• Fortinet: Hit a new high, with shares appreciating 142% from their January low.

Upcoming Economic Data: Durable Goods

Investors will be keenly watching the release of the August durable goods numbers, set to be announced live on "Squawk Box" at 8:30 a.m. ET. Dow Jones consensus estimates currently anticipate a 0.3% decrease, a figure that could further influence market sentiment.