Long-dated Treasury yields fell to eight-week lows on Thursday, with the 10-year at 4.837% and the 30-year at 5.229%, according to Tradeweb figures.
Two forces pushed the same way. Democrats swept the midterms and took control of Congress, and a second day of selling in AI-linked stocks sent money looking for shelter.
The logic on Washington is about supply. Bond investors read a divided government as a brake on further fiscal expansion, the force that had been pushing long-term yields higher.
We have mapped what the blue wave means for stocks and bonds.
"Gridlock could be the bond market's friend, but it won't fix the deficit," said MissionSquare chief investment officer Shari Hensrud in a note.
Large deficits persist, and the dollar's path, AI regulation and the conflict with Iran weigh on the market, said Michael Titz, head of investment office at Bankhaus Herzogpark.
The AI trade is the other half of the move
The equity side is the louder driver. Selling in AI-linked shares more than erased the prior session's gains, and the weakness carried into Asia.
The midterm result cuts both ways for that trade. Voters backed anti-data center candidates and ballot measures, and Democratic wins raise the prospect that local governments could halt new data center construction. Fewer data centers would mean fewer chip orders, and less demand for the electricity and equipment that have carried much of the economy's growth.
The data center backlash has its own history.
The long end moved, the front end did not
The tell is in which maturities rallied. Two-year yields hit a two-month low on Wednesday and last traded slightly above that level.
That is because the short end tracks the Federal Reserve, inflation and the labor market rather than the federal borrowing plan. Traders are waiting on October's nonfarm payrolls report due Friday.
Oil helped too. Brent crude held below $100 a barrel after dropping nearly 9% the day before on hopes that escalation in the Iran war has become less likely.
Higher oil has weighed on government bonds around the world for much of this year, so a cooler energy tape eases one inflation risk that had been pushing yields up.
The 10-Year Treasury Yield Has Fallen Since October
10-year Treasury yield, %, as of Nov. 5, 2026
Bar chart. 10-Year Treasury Yield (%). Last month high: Yield (%) 5.30%. Election night (Nov. 3): Yield (%) 4.95%. Thursday (Nov. 5) eight-week low: Yield (%) 4.84%.
Source: AP, Dow Jones/Tradeweb
What falling long yields mean for housing
The drop in long yields arrives with mortgage rates already near their lowest level since September 2026, after the Federal Reserve held off on further hikes in October.
The average 30-year fixed rate fell to 7.3% last week from 7.37%, the third straight weekly decline.
Borrowers have not responded. Purchase applications ran 19% below a year earlier and refinance demand was 60% lower, with rates still about a full percentage point above where they sat last year.
More households are reaching for adjustable-rate loans to cut their starting payment. The average 5/1 ARM rate fell to 6.29% from 6.41%.
For households, the test is whether the long end holds these levels long enough to pull mortgage rates lower. Until then, housing has little reason to thaw.
