Stocks Fall as Oil Rally Keeps a Lid on Treasuries: Markets Wrap
(Bloomberg) — A resurgence in oil prices dragged down stocks and bonds, stoking concerns about inflation just days ahead of the Federal Reserve decision on interest rates.
Brent crude topped $116 as a flare-up in Middle East violence threatened global supplies. The S&P 500 saw back-to-back losses. That’s even as selling pressure on tech firms abated. A gauge of chipmakers rebounded, while still heading toward its longest weekly slide since November. Treasury yields rose after the market’s best day in more than a year.
Investors’ risk-off mood is likely to continue well into November, according to Bank of America Corp.’s Michael Hartnett, a sign of how jitters around the artificial-intelligence trade and the midterm elections have held back equities.
“We stay tactically risk-off until mid-Nov,” the strategist wrote in a note to clients Friday. “Expect down-in-yields, down-in-stocks, down-in US dollar trade.”
The recent selloff in AI-linked stocks is a reminder that the most popular trades tend to hurt the most when sentiment turns. When everyone owns the same story, even a small disappointment can set off a rush for the exits, according to Brian Jacobsen at Annex Wealth Management.
“The practical takeaway is not to abandon growth stocks, but to check whether one theme has quietly grown to dominate your portfolio after a long run,” he said. “Rebalancing, which means trimming what has grown too large and adding to what has lagged, is a simple way to keep risk in check without trying to predict the next move.”
“Four forces explain this week’s yo-yo: a solid earnings season and attractive bond yields on one side, the cost of financing and more selective sovereign stress on the other,” said Florian Ielpo at Lombard Odier Asset Management.
The problem is not that equities are pricey, it’s that bonds are no longer expensive, he said.
“The latest moves do not alter our view that robust earnings should continue to support equities,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. “AI demand remains strong, current bond yields provide attractive income, and geopolitical developments alone do not justify a broadly defensive investment stance.”
The Fed has been clear that it’s aware AI is boosting US demand. With inflation above target across a range of measures, leaning against that impulse through modest rate adjustments and tighter financial conditions is sensible policy, according to Tiffany Wilding at Pacific Investment Management Co.
“However, the economic adjustments now underway could evolve in several ways, and inflation is elevated but not accelerating,” she said. “This likely gives the Fed room to take a measured approach.”
Corporate Highlights:
SpaceX aims to secure a minimum of 80,000 cell sites across the US, and it’s in talks with at least one major cellular infrastructure company to reach that goal, according to people familiar with the matter. Apple Inc. quickly sold out of its limited in-store inventory for the new iPhone Duo, underscoring the strong demand for a foldable device that starts at nearly $2,000. American Express Co. is cutting 5% of its headcount globally as Chief Executive Officer Steve Squeri seeks to keep a lid on the company’s rising costs. SLB, the world’s biggest oil field services provider, said it has seen a gradual recovery in its Middle East business despite disruptions from the Iran war. Bristol Myers Squibb Co. has reported a death in its clinical trials of an experimental cell therapy for autoimmune diseases, potentially adding to safety concerns about a promising new class of treatments. What Bloomberg Strategists say…
“Rising oil is taking the baton from credit concerns as the main threat to the equity rotation that has been keeping the S&P 500 afloat.”
—Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 3 p.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 1.1% The MSCI World Index fell 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.2% to $1.1193 The British pound fell 0.2% to $1.3372 The Japanese yen was little changed at 156.87 per dollar Cryptocurrencies
Bitcoin rose 0.2% to $81,365.9 Ether rose 0.8% to $2,399.56 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.99% Germany’s 10-year yield advanced one basis point to 3.35% Britain’s 10-year yield advanced three basis points to 5.36% Commodities
West Texas Intermediate crude rose 4% to $103.40 a barrel Spot gold fell 0.7% to $3,998.06 an ounce ©2026 Bloomberg L.P.
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