Elevated yields, higher oil prices test global stocks as rate fears persist
TLT•Oil rose 1% to $106 a barrel as French and U.S. 10-year yields hovered near multi-year highs, weighing on global equities. Australia’s central bank raised rates to a 15-year high, while investors priced in a 72% chance of a Fed rate hike in October.
1. Yields pressure markets
Oil prices rose and bond yields remained near multi-year highs, putting global stocks under pressure as investors anticipated short-term borrowing costs staying at their highest levels in years. French 10-year yields were at 4.7619%, their 2008 high, while U.S. 10-year yields hovered near their 19-year high of 5.27%. Both were on track for sharp monthly increases.
2. Stocks and oil
Europe’s STOXX 600 rose 0.3%, helped by technology stocks, while Nasdaq and S&P 500 futures were steady. Brent crude gained 1% to $106 a barrel as renewed efforts to end the Middle East conflict continued. The conflict and high government borrowing and bond issuance have contributed to investor concerns about inflation and interest rates.
3. Rates and other assets
Australia’s central bank raised rates to a 15-year high, as expected, and market participants have bet on further increases. Investors saw a 72% chance of at least a 25-basis-point Fed hike in October, according to the CME Group’s FedWatch Tool. Separately, a report said Anthropic’s planned IPO could value the company at more than $2 trillion, and that it planned to spend $518 billion on cloud, computing and infrastructure.
