Morning bid Americas: Bonds, bombs and barricades
SPY•Political risk, rising energy prices and heavy corporate borrowing kept bond markets tense as the 10-year Treasury yield reached a 24-year high of 5.364%. U.S. stocks eased late in the week after the Nasdaq and S&P 500 hit record highs, while investors awaited earnings and September inflation data.
1. Bond market pressure
The spread between French and German 10-year debt widened beyond 140 basis points, its highest since 2012, as investors sold debt from highly indebted countries and sought German Bunds. France’s 2027 budget aims to reduce its deficit to 5% from an expected 5.4% this year, but a divided parliament and protests pose challenges to its passage.
2. Yields and energy rise
The 10-year U.S. Treasury yield briefly reached 5.364% on Wednesday, a fresh 24-year high, before easing after strong demand at a 30-year bond auction. Brent crude rose 4% Thursday to above $104 a barrel amid intensified attacks in the Strait of Hormuz and Saudi Arabia, then gave back some gains Friday.
3. Stocks and AI borrowing
The Nasdaq and S&P 500 reached record highs Tuesday but eased late in the week as crude prices climbed. Chip stocks came under pressure after reports that OpenAI’s September annualized revenue was $20 billion below previous indications. The article also cited planned financing by Broadcom of $50 billion and SpaceX debt of $30 billion, alongside $10 billion in loans to buy Nvidia chips.
