US Stocks Slide With Bonds as Oil Resumes Advance: Markets Wrap
(Bloomberg) — US stocks fell and Treasury yields climbed as fading hopes for an imminent breakthrough in the Iran war sent oil prices higher and reignited worries that inflation is heating up.
Tehran’s refusal to soften its conditions to reopen the Strait of Hormuz and mixed signals from President Donald Trump on further talks drove Brent crude above $107 a barrel. Treasuries fell across the curve as traders added to bets for US interest-rate hikes, lifting the two-year yield five basis points to 4.91%.
Nasdaq 100 futures fell 0.9%. Chipmakers were among the biggest decliners in Asian markets. S&P 500 contracts slipped 0.4%. Europe’s Stoxx 600 bucked the broader trend, rising 0.4% as consumer stocks rallied. The dollar wavered, while gold fell by the most in a month.
Investors are navigating geopolitical risks and intensifying price pressures even as corporate profitability remains robust and major economies show resilience. For now, oil is keeping bond yields near multi-year highs, with the pressure from rates feeding through to other asset classes.
“A lot is moving against equities at the moment: oil is on the rise and bond yields are going through the roof,” said Laurent Lamagnere at AlphaValue. “It’s quite hard for me to be optimistic.”
The prospect of imminent rate hikes saw gold extend losses for September to more than 6%. Rising yields have dimmed the allure of the precious metal, which pays no interest. Investors see about a 70% probability of a Federal Reserve rate hike next month, up from about 65% on Friday.
In the UK, shares in homebuilders surged after the government announced a loan program to help first-time buyers. Taylor Wimpey Plc rose 14%, while Persimmon Plc rallied 15% and Barratt Redrow Plc advanced 14%.
What Bloomberg Strategists Say:
“Gold is adding to its recent declines, in keeping with its inverse correlation to moves in the oil complex as bond-market investors take on the role of tightening conditions on behalf of central banks. Given a structural reset of global interest rates higher, gold’s funk looks set to linger longer this time around.”
Corporate News:
TotalEnergies SE pledged to boost its dividend by more than 5% a year through 2030 and boosted its share buybacks as the French energy major benefits from rising oil and gas output and surging prices. SK Hynix Inc. shares fell as reports of a potential listing of the chipmaker’s US subsidiary added to concerns over its complex ownership structure. Nu Holdings Ltd. has held discussions to acquire UK digital bank Monzo Bank Ltd., according to people with knowledge of the matter. Australia’s biggest gold miner Northern Star Resources Ltd. rejected a cash-and-shares takeover approach from South African rival Gold Fields Ltd. valuing it at A$38.7 billion ($27.1 billion). Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.5% as of 9:18 a.m. London time S&P 500 futures fell 0.4% Nasdaq 100 futures fell 0.9% Futures on the Dow Jones Industrial Average fell 0.3% The MSCI Asia Pacific Index fell 0.7% The MSCI Emerging Markets Index fell 1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1383 The Japanese yen rose 0.4% to 156.67 per dollar The offshore yuan rose 0.1% to 6.7145 per dollar The British pound rose 0.2% to $1.3268 Cryptocurrencies
Bitcoin fell 1.9% to $82,944.54 Ether fell 1.3% to $2,649.35 Bonds
The yield on 10-year Treasuries advanced five basis points to 5.21% Germany’s 10-year yield advanced two basis points to 3.63% Britain’s 10-year yield advanced three basis points to 5.39% Commodities
Brent crude rose 2.6% to $106.99 a barrel Spot gold fell 3.1% to $4,153.28 an ounce This story was produced with the assistance of Bloomberg Automation.
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