Stocks cautious in Asia as oil gains and yields rise
SPY•Asian shares started cautiously as Brent crude rose 1.6% to $106 a barrel after Donald Trump rejected an Iranian proposal to reopen the Strait of Hormuz. Thirty-year Treasury yields climbed to 5.5185%, near their highest since 2004, as markets priced in further Federal Reserve rate hikes.
1. Oil and rates rise
Brent futures rose 1.6% to $106 a barrel, while U.S. crude gained 1.1% to $93.47. The moves followed Trump’s rejection of an Iranian proposal to reopen the Strait of Hormuz; he said talks would continue this week. Diesel prices have reached all-time highs, raising concerns that inflation could become embedded in pricing and wage decisions.
2. Markets weigh outlook
Japan’s Nikkei gained 0.8%, South Korean shares dipped 0.6% and an index of Asia-Pacific shares outside Japan eased 0.2%. S&P 500 futures fell 0.2%, while Nasdaq futures were flat. Thirty-year Treasury yields rose to 5.5185%, near their highest since 2004, and markets implied a 66% chance of a Federal Reserve hike in October.
