Bonds set for bruising September, but stocks remain resilient
TLT•Global bonds were set for their worst month in years as borrowing costs rose, while stocks remained broadly resilient. The 10-year U.S. Treasury yield was 5.209%, near its highest level since 2007, and the dollar was on track for a roughly 2% monthly gain.
1. Bond yields climb
Global bonds were set for their worst month in years, pressured by deteriorating government finances, heavy debt issuance and rising inflation as the war on Iran kept energy costs elevated. The 10-year U.S. Treasury yield stood at 5.209%, near its highest level since June 2007, and was set to rise more than 45 basis points for the month, its largest monthly move in about two years. German and French 10-year yields hit 17-year and 18-year highs this week.
2. Stocks stay resilient
Stocks were broadly resilient despite the rise in borrowing costs, with support from earnings growth, global economic strength and enthusiasm for artificial intelligence. Europe's STOXX 600 rose 0.6% and was broadly unchanged for the quarter, while Nasdaq and S&P 500 futures gained 0.2% and nearly 0.3%, respectively. China's CSI 300 was up 0.3% but on course for a 12% quarterly decline.
3. Dollar and commodities
The dollar was on track for a roughly 2% monthly gain, aided by higher U.S. yields. U.S. crude was unchanged at $89.41 a barrel and Brent eased 0.1% to $102.47, with both set for monthly gains on concerns about prolonged supply disruptions.
