Stocks Fall as US-Iran Turmoil Keeps Oil Elevated: Markets Wrap
(Bloomberg) — Stocks fell while bond yields stayed elevated as intensifying US-Iran hostilities extended oil’s advance, leaving the prospect of September interest-rate hikes across major economies firmly in play.
Brent crude fluctuated near $95 a barrel after the US carried out its second round of attacks against the Islamic Republic in three days. Bonds fell in Europe and Asia. Thirty-year Treasury yields were around 5.29%, near the 19-year high hit before Treasury Secretary Scott Bessent expanded a buyback program to contain long-term borrowing costs.
S&P 500 futures dropped 0.3% after three straight sessions of losses. Chipmakers were under pressure in premarket trading. Dell Technologies Inc. rallied on a strong revenue forecast. Europe’s Stoxx 600 retreated 0.6%, while Asian stocks fell the most in two weeks. The dollar barely budged.
The latest rally in energy prices is compounding worries about persistent inflation, pushing up the premium traders demand for bonds already straining under heavy government spending and corporate demand. Traders put the odds of rate hikes this month at more than 50% for three major central banks, including nearly 70% for the Fed.
“The new baseline seems to be that the Fed will, after all, hike rates in September,” wrote Chris Turner at ING Groep NV. “Fed Chair Kevin Warsh has made it reasonably clear that inflation is not falling quickly enough to target and, given a reasonably strong economy, the Fed will need to act.”
While the ongoing selloff in global bond markets is showing few signs of letting up, the relatively modest moves in yields have offered traders some assurance. The retreat has been orderly and broad-based, rather than driven by credit risks or liquidity stress, said Stephan Kemper at BNP Paribas Wealth Management Germany.
“It suggests the market is pricing a higher-for-longer rate path, not a credit event or recession,” Kemper said. The key to lower yields lies in inflation expectations, he said, adding that any relief on longer-dated rates could “trigger a strong move higher in equities as fundamentals remain very strong.”
While stock markets have remained relatively calm, “that’s likely going to change once Treasury yields and Japanese yields break through current resistance levels,” said Patrik Lang at Global Gate Asset Management.
“Positioning is a bit stretched, and short-term indicators are at overbought levels,” he said. “All of that points, regardless of the fundamental situation, to consolidation in the coming weeks.”
What Bloomberg Strategists Say:
“I see four forces broadly pushing yields higher: repeated supply shocks, higher commodity prices, massive demand for capital and a higher neutral rate and term premium. In the short term, commodity pressures make a benign path to lower inflation unlikely. For bonds to rally, we probably need either geopolitical tensions to ease or growth to weaken.”
Corporate News:
Nvidia Corp. is in advanced talks to acquire artificial intelligence startup Hugging Face in a transaction that may total about $14 billion, according to people familiar with the matter. Italian gaming company Lottomatica Group SpA agreed to buy Spanish rival Cirsa Enterprises SA in an all-share deal valued at about €2.8 billion ($3.2 billion). The cybersecurity firm Palo Alto Networks Inc. issued a profit outlook for the year that exceeded Wall Street’s expectations, fueled by corporate demand for stronger defenses against advancing artificial intelligence systems. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.6% as of 10:33 a.m. London time S&P 500 futures fell 0.3% Nasdaq 100 futures fell 0.6% Futures on the Dow Jones Industrial Average fell 0.1% The MSCI Asia Pacific Index fell 1.9% The MSCI Emerging Markets Index fell 1.7% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1576 The Japanese yen rose 0.2% to 159.85 per dollar The offshore yuan was little changed at 6.7244 per dollar The British pound fell 0.1% to $1.3498 Cryptocurrencies
Bitcoin fell 1% to $76,643.51 Ether fell 2% to $2,371.36 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.81% Germany’s 10-year yield advanced five basis points to 3.39% Britain’s 10-year yield advanced six basis points to 5.28% Commodities
Brent crude rose 0.4% to $95.02 a barrel Spot gold fell 0.4% to $4,309.57 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Cecile Gutscher.
©2026 Bloomberg L.P.
