Stocks Waver as Yields Climb on Rate Hike Bets: Markets Wrap
(Bloomberg) — Stocks kicked off September on a cautious note, with bond yields touching multi-decade highs as traders kept adding to bets that central banks will raise interest rates as soon as this month.
Futures for the S&P 500 and European stocks were little changed. Bonds fell across the world. In Japan, the 10-year yield reached the highest level this century as US Treasury Secretary Scott Bessent ramped up pressure on the Bank of Japan to raise rates further amid renewed weakness in the yen.
Ten-year Treasury yields climbed three basis points to 4.78%, the highest since January 2025. UK gilts underperformed in Europe. Adding to a challenging inflation backdrop was a rise in oil prices, with Brent crude topping $91 a barrel on concerns over disruptions to energy flows through the Strait of Hormuz.
Traders boosted the odds of a September US rate hike to 67%, extending a repricing that began last week when Chair Kevin Warsh doubled down on a pledge to tame inflation. Bets on a quarter-point hike by BOJ policymakers at their next meeting in two weeks climbed to more than 90%.
Investors are demanding greater compensation to hold bonds after years of heavy government spending, persistent inflation and a surge in corporate borrowing to finance the artificial-intelligence buildout. Not since 2006 have yields on the longest-maturity Treasuries been above 5% for this long.
Equity investors “should be much more worried about rising long-term bond yields, particularly in the US,” said Joachim Klement, a strategist at Panmure Liberum. “Continued inflation pressures and the more hawkish stance of Kevin Warsh in Jackson Hole last week all point to continued increases.”
Corporate News:
Shein Global Holdings Ltd. struggled in its Hong Kong debut after a years-long process to an initial public offering. Anthropic PBC agreed to a $35 billion computing deal with Lambda, a cloud provider backed by Nvidia Corp., part of an effort to quickly expand its AI capacity, according to a person familiar with the matter. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 was little changed as of 8:32 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index rose 0.4% The MSCI Emerging Markets Index rose 0.5% Currencies
The Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.2% to $1.1597 The Japanese yen fell 0.2% to 159.99 per dollar The offshore yuan was little changed at 6.7234 per dollar The British pound fell 0.1% to $1.3535 Cryptocurrencies
Bitcoin fell 0.1% to $78,762.32 Ether was little changed at $2,474.78 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.78% Germany’s 10-year yield advanced two basis points to 3.34% Britain’s 10-year yield advanced 16 basis points to 5.22% Commodities
Brent crude rose 1.3% to $91.64 a barrel Spot gold fell 0.3% to $4,424.28 an ounce This story was produced with the assistance of Bloomberg Automation.
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