Stocks Churn as Long-Term Yields Hit 24-Year High: Markets Wrap
(Bloomberg) — A decline in oil prices did little to allay Wall Street’s concerns that still-elevated energy costs could fuel inflation and spur Federal Reserve interest-rate hikes.
Those worries sent Treasury 30-year yields to the highest level since 2002. More than 300 companies in the S&P 500 fell, with the gauge fluctuating. The dollar rose. The euro hit its weakest in 16 months. Brent crude dropped below $103 as the Trump administration ordered another release of oil from emergency reserves amid a stalemate in US-Iran talks.
“The conflict in the Middle East and the implications for forward inflation remain the primary macro narrative and are likely to dictate price action in US rates for the foreseeable future,” said Ian Lyngen at BMO Capital Markets.
Investors are demanding greater compensation to hold bonds as concerns about persistent inflation, government spending and surging corporate borrowing to finance the artificial-intelligence buildout intensify. Against this backdrop, money markets are pricing a series of rate hikes over the next year.
Fed Bank of New York President John Williams said one more rate increase this year may be appropriate to help contain inflation, but added there’s no urgency to act. Following his remarks, investors dialed back their wagers on an October hike.
Meantime, Fed Governor Michael Barr on Tuesday repeated a warning that further rate increases will likely be needed to slow inflation.
“We want to support sustainable, durable growth in support of maximum employment, and price stability is crucial to that,” he said in remarks prepared for an event in Detroit.
In economic news, US job openings fell to a five-month low, suggesting employers grew more cautious about expanding their workforces toward the end of the summer, while layoffs remained subdued. Consumer confidence dropped to the lowest level since 2014.
The latest labor-market data reinforces the “low-hire, low-fire” backdrop that has taken hold, according to Bret Kenwell at eToro. On the consumer-confidence front, he says the disappointing headline figure should not come as a surprise.
“Sentiment now sits at multi-year lows as persistent inflation and higher costs weigh on households,” Kenwell noted. “The question becomes whether we’ll see this materialize into weaker consumer spending — a question that earnings season will help answer.”
Corporate Highlights:
President Donald Trump shot down the idea of new federal regulations on artificial intelligence after meeting with top industry executives amid growing concerns over threats posed by the technology. OpenAI aims to raise at least $30 billion from investors in a new round of funding, according to people familiar with the matter, after the AI startup pushed back its plans for an initial public offering. OpenAI has unveiled an always-on artificial intelligent agent that’s designed to proactively tackle work on a user’s behalf. Apple Inc. Chief Executive Officer John Ternus, just weeks into the role, is moving to overhaul the iPhone maker in an effort to accelerate product development, broaden its range of devices and create a leaner organization with a greater focus on engineering. Paramount Skydance Corp. is promising to cut $6 billion in costs within three years as it looks to lock in lenders for its blockbuster Warner Bros. Discovery Inc. acquisition. Some investors approached about potentially buying shares in Oura Inc.’s now-delayed IPO decided not to go forward because of concerns including the health and fitness ring-maker company’s target valuation, according to people familiar with the matter. What Bloomberg Strategists say…
“Stocks and bonds are vulnerable to further downside as ‘peak hawkishness’ is a long way off by historic norms.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.1% as of 3:34 p.m. New York time The Nasdaq 100 rose 0.2% The Dow Jones Industrial Average fell 0.2% The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1340 The British pound fell 0.2% to $1.3228 The Japanese yen was little changed at 157.26 per dollar Cryptocurrencies
Bitcoin was little changed at $83,563.38 Ether rose 0.5% to $2,695.79 Bonds
The yield on 10-year Treasuries advanced two basis points to 5.26% Germany’s 10-year yield declined two basis points to 3.63% Britain’s 10-year yield declined one basis point to 5.41% The yield on 2-year Treasuries declined four basis points to 4.89% The yield on 30-year Treasuries advanced five basis points to 5.59% Commodities
West Texas Intermediate crude fell 3.6% to $89.24 a barrel Spot gold rose 1.3% to $4,170.51 an ounce ©2026 Bloomberg L.P.
