Asian Bonds Follow Treasuries Lower, Stocks Fall: Markets Wrap

(Bloomberg) — Asian bonds declined and Treasuries held losses as elevated oil prices kept inflation concerns alive. Most regional stocks fell.

Government bonds in Japan, Australia and New Zealand slipped in early Asian trading, while the Treasury 10-year yield edged up one basis point to 5.30%, remaining near the highest level since 2007 reached on Wednesday. US 30-year yields also climbed by one basis point, having reached the highest since 2002 in the New York session.

Oil steadied after gaining on Wednesday due to uncertainty over whether a recovery in Middle East flows can be sustained. Brent crude for December delivery traded near $98 a barrel following a 1.9% advance in the prior session.

As oil rose, US equity-index futures pared gains, with contracts for the S&P 500 Index edging up 0.2% after late swings on Wall Street erased gains sparked by US inflation data. MSCI’s gauge of Asia Pacific equities dropped 0.5%.

Bonds remained in focus after global government debt posted its worst quarter since 2024 as oil near $100 a barrel revived concerns about persistent inflation. Some relief came after the August reading for the Federal Reserve’s preferred inflation gauge was softer than economists forecast, prompting money markets to cut the odds of an October interest-rate hike to less than 40%.

Wall Street’s late swings underscored uncertainty over the outlook for equities despite easing inflation concerns and reduced expectations for another Fed rate hike. Attention now turns to US payrolls data due Friday, while traders start paying increased attention to the midterm elections in November to assess whether stocks can regain ground.

“We believe a strong earnings season and getting past the midterm elections are what will break the market out of its trading range and see new highs by year-end,” said Chris Zaccarelli at Northlight Asset Management.

Elsewhere, Micron Technology Inc. gave an upbeat forecast, but warned that rising compensation costs would weigh on profit margins. Alphabet Inc.’s shares rose after Google began rolling out the Gemini 4 Argon, its long-awaited flagship artificial intelligence model.

The key event on Wednesday was the inflation data. The US personal consumption expenditures price index excluding food and energy rose a less-than-expected 0.2%. The prior month was also revised lower. Consumer spending, meanwhile, increased at the fastest pace in more than a year, offering signs of cooling price pressures alongside resilient demand.

Wednesday’s data delivered a “goldilocks combination,” said Chris Osmond, chief investment officer at Fifth Third Wealth Advisors.

“Second-quarter growth was stronger than expected, consumer spending was more robust, the labor market rebounded sharply in September and the Fed’s preferred inflation gauge came in well below expectations,” he said. “The net effect is broadly supportive of risk assets and materially reduces the probability of an October rate hike.”

That helped a rally in US stocks for much of Wednesday. Short-dated Treasury yields were little changed, while 30-year yields gained six basis points. The yield on the 10-year climbed as much as seven basis points to 5.30%.

Global government bonds finished their worst quarter since 2024 as $100 oil revived the threat of sticky inflation for the world economy. A Bloomberg index of the debt posted its worst quarterly loss since the three-month stretch at the end of 2024, when Donald Trump won a second term as US president and investors braced for a more expansionary fiscal policy.

“Bond markets are facing a triple whammy — big government spending, strong growth and geopolitical supply shocks,” said Jimmy Louca, senior portfolio manager at Australian Retirement Trust. “We’ve moved into a reflationary regime and the market has been slow to price it.”

Corporate Highlights:

The Federal Trade Commission is scrutinizing OpenAI, Anthropic PBC and other AI companies about the safety of their products amid high-profile cybersecurity incidents, according to a person familiar with the matter. Paramount Skydance Corp.’s David Ellison named former Mattel Inc. chief Ynon Kreiz to the new position of co-CEO. Apple Inc. plans to make its long-delayed push into the smart-home market on Oct. 13, marking a critical product expansion for the company under new Chief Executive Officer John Ternus.

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 9:52 a.m. Tokyo time Hang Seng futures fell 0.7% Nikkei 225 futures (OSE) rose 1.3% Japan’s Topix fell 0.6% Australia’s S&P/ASX 200 fell 1.2% Euro Stoxx 50 futures fell 0.7% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1334 The Japanese yen fell 0.3% to 157.83 per dollar The offshore yuan was little changed at 6.7116 per dollar Cryptocurrencies

Bitcoin fell 0.2% to $83,456.29 Ether rose 0.1% to $2,684.56 Bonds

The yield on 10-year Treasuries advanced two basis points to 5.30% Japan’s 10-year yield advanced 3.5 basis points to 3.085% Australia’s 10-year yield advanced seven basis points to 5.42% Commodities

West Texas Intermediate crude rose 0.1% to $90.53 a barrel Spot gold fell 0.4% to $4,141.90 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Toby Alder and Ruth Carson.

©2026 Bloomberg L.P.