S&P 500 ends down as Treasury yields rise and traders fret about inflation
North American stocks ended Thursday lower as rising Treasury yields and high oil prices stoked inflation fears. The S&P 500 declined following August producer price data that exceeded expectations, leading traders to anticipate a Federal Reserve interest rate hike next week. Brent crude jumped to over $100 a barrel, reaching its highest level since May, after the U.S. destroyed Iranian oil tankers. This energy spike fueled a global bond market sell-off, pushing the 10-year Treasury yield toward 5%. Futures for the Dow, S&P 500, and Nasdaq indicate an attempt to recover on Friday.
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- ✓ Brent crude oil prices rose above $100 a barrel.
- ✓ The 10-year Treasury yield closed in on 5%.
- ✓ North American stocks ended down on Thursday.
- ✓ August producer price data was hotter than expected.
What changed
U.S. military action against Iranian oil tankers drove Brent crude above $100 and pushed 10-year Treasury yields toward 5%.
Live updates
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S&P 500 Drops as Oil Surges and Treasury Yields Approach 5%
North American stocks ended Thursday lower as rising Treasury yields and high oil prices stoked inflation fears. The S&P 500 declined following August producer price data that exceeded expectations, leading traders to anticipate a Federal Reserve interest rate hike next week. Brent crude jumped to over $100 a barrel, reaching its highest level since May, after the U.S. destroyed Iranian oil tankers. This energy spike fueled a global bond market sell-off, pushing the 10-year Treasury yield toward 5%. Futures for the Dow, S&P 500, and Nasdaq indicate an attempt to recover on Friday.
Why it matters
Escalating hostilities in the Middle East have disrupted supply routes through the Red Sea and the Strait of Hormuz. Higher energy costs typically drive up producer inflation, which may force the Federal Reserve to maintain a tighter monetary policy. This environment reduces the attractiveness of stocks relative to climbing bond yields.
What is confirmed
- Brent crude oil prices rose above $100 a barrel.
- The 10-year Treasury yield closed in on 5%.
- North American stocks ended down on Thursday.
- August producer price data was hotter than expected.
- Oil prices reached their highest level since May.
Still unconfirmed
- Brent crude jumped 6% to $107 due to the U.S.-Israeli war on Iran.
- The Federal Reserve will hike interest rates next week.
What to watch next
- Federal Reserve interest rate decision next week
- Further updates on Middle East supply route disruptions
- Performance of stock futures following the oil rally pause
confidence 90%Sources used for this update (12)
- CNBC — Oil extends gains, with Brent above $101 after U.S. destroys Iranian oil tankers
- Yahoo Finance — Stock market today: Dow, S&P 500, Nasdaq futures look to snap 3-day losing streak as oil pauses rally
- AP News — Asian shares fall and oil prices trade above $100 a barrel
- CNBC — Stock futures inch higher as traders brace for wholesale inflation report: Live updates
- The New York Times — Oil Prices Surge as Fighting in Middle East Escalates
- Reuters — Wall St set for lower open after hotter-than-expected producer inflation data
- Bloomberg.com — Oil Extends Rally Above $100 as Middle East Hostilities Escalate
- TribLIVE.com — Oil prices leap to their highest since May and drag Wall Street lower
- www.theglobeandmail.com — Stocks end lower as Treasury yields rise and traders fret about inflation
- insurancenewsnet.com — Treasury yields rise amid inflation worries S&P 500 ends down as Treasury yields rise and traders fret about inflation (copy)
- www.marketscreener.com — ROI-Triple-digit oil, yen whiplash and a $2,000 iPhone: The financial week in five charts
- www.marketscreener.com — U.S. 10-Year Treasury Yield Nears 5% as Oil Fuels Inflation Fears -- 3rd Update
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