Stocks Decline Amid Rising Crude Prices and Bond Yields
Global stock markets are falling as crude oil prices rise more than 2% amid ongoing supply disruptions in the Middle East, particularly from a closed Saudi pipeline following Houthi rebel attacks. The increase in energy costs is stoking inflation concerns and pushing bond yields to multi-decade highs: U.S. 10-year Treasury notes reached a 19-year high of 5.04%, German Bunds hit a 17-year peak at 3.57%, and Japanese JGB bonds climbed to a 30-year top of 3.04%. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all fell sharply today, with the latter two hitting six-week lows. The AI sector remains under pressure as debates over potential risks from advanced technologies continue, tempering enthusiasm for tech stocks that had driven gains earlier this year. Meanwhile, economic data out of China was mixed but generally weak: retail sales and home prices declined while unemployment rose slightly. U.S. manufacturing sentiment also came in below expectations. Markets are pricing a 94% chance of a Fed rate hike at the upcoming FOMC meeting. Despite some recovery among chipmakers and AI infrastructure stocks, losses remain broad across global equities.
Topics: bond_yields crude_oil_prices inflation_expectations stock_indices