Stocks Fall as Brent Tops $90 on Middle East Risks: Markets Wrap
(Bloomberg) — Stocks and bonds fell on concern that elevated oil prices will fuel inflation as hopes for a deal to end the almost six-month war in the Middle East faded.
Those worries sent equities further away from their all-time highs, with losses in most S&P 500 companies overshadowing an advance in chipmakers. Brent crude topped $90 a barrel, spurring speculation that inflationary pressures could make the Federal Reserve raise rates before the year is over. Treasury 30-year yields hit the highest level since 2007.
Prospects for peace in the Middle East suffered a setback, with fighting flaring anew in Lebanon and President Donald Trump telling Fox News he’s in no hurry to end the war with Iran. He also warned that if “Oman gets in the way we’ll bomb the s—— out of them.”
Speaking later with reporters, Trump also reiterated the US controls the Strait of Hormuz, and said “no” when asked if America is seeking to extend the memorandum of understanding with Iran.
Given the rise in oil prices and the lack of progress on the US-Iran diplomatic front, the Middle East remains a risk factor, according to Chris Larkin at E*Trade from Morgan Stanley.
Also contributing to investor anxiety was the rise in long-term yields. That reflects investor angst over surging government spending, a flood of long-dated bond sales, and inflation that’s been stuck over the Fed’s target for the past five years.
“Investors are increasingly focused and concerned about the growing amount of US debt and America’s lack of fiscal discipline,” said Anthony Saglimbene at Ameriprise. “And frequent, large-scale treasury auctions are a chance for the bond market to push back against the government’s eroding fiscal trajectory, as they demand higher yields for the auctions to clear.”
The calculus regarding longer-term Treasury holdings increasingly requires that an investor be comfortable financing ever-larger government borrowing needs at current yields, he added.
“And should investors require more compensation in the future as more Treasury auctions come to market, it will be increasingly important for corporate fundamentals and AI momentum to continue meeting expectations if the equity market is to keep looking past a higher-for-longer rate environment,” Saglimbene concluded.
Corporate Highlights:
Anthropic PBC is telling prospective investors its second-quarter revenue jumped at least 14-fold versus the same period a year ago, according to documents seen by Bloomberg News. Nvidia Corp. has agreed to spend as much as $105 billion to support a massive new data center campus in Ohio set to be leased by OpenAI, marking the latest tie-up between two dominant forces driving the AI boom. L3Harris Technologies Inc. abruptly replaced Chief Executive Officer Christopher Kubasik following a conduct review, in a surprise shakeup atop one of the biggest US defense contractors as weapons makers come under pressure to boost output. RTX Corp. won a contract valued at $23 billion from the US Navy to accelerate production of more than 7,000 Tomahawk cruise missiles, one of the US’s most potent offensive weapons, as stockpiles have come under strain in the five-month war on Iran. Berkshire Hathaway Inc. increased its holdings in Delta Air Lines Inc. and Google parent Alphabet Inc. as Greg Abel began tapping into the company’s massive cash hoard. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.4% as of 2:55 p.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 0.5% The MSCI World Index fell 0.3% Philadelphia Stock Exchange Semiconductor Index rose 2.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1573 The British pound was unchanged at $1.3538 The Japanese yen fell 0.2% to 159.58 per dollar Cryptocurrencies
Bitcoin rose 2.2% to $64,393.1 Ether rose 1.5% to $1,908.7 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.72% Germany’s 10-year yield advanced two basis points to 3.22% Britain’s 10-year yield advanced two basis points to 5.06% The yield on 2-year Treasuries advanced one basis point to 4.18% The yield on 30-year Treasuries advanced five basis points to 5.31% Commodities
West Texas Intermediate crude rose 2.3% to $84.30 a barrel Spot gold rose 0.7% to $4,407.28 an ounce ©2026 Bloomberg L.P.
