Stocks Fall With Bonds as Oil Surges Anew on Iran: Markets Wrap
(Bloomberg) — A slide in chipmakers dragged down stocks while a bond selloff deepened amid a spike in oil as headlines continued to depict war escalating in Iran and the Middle East. Bitcoin slumped.
While the S&P 500 bounced from session lows, most of its shares fell. A key gauge of semiconductor firms dropped 1.2% as Bloomberg News reported the US is considering requiring permits for artificial-intelligence chip sales.
The US-Israeli war on Iran waged for a sixth day with little sign of easing, extending a surge in energy prices. US oil settled around $81 on signs the conflict is disrupting crude flows to key buyers, with top importer China moving to conserve fuel.
The Trump administration is weighing a range of options for addressing the surge in oil and gasoline prices, Interior Secretary Doug Burgum said.
A global bond rout showed no respite, with the 10-year Treasury yield rising for a fourth straight day on concern that higher oil prices will fuel inflationary pressures that could hinder the Federal Reserve’s ability to cut rates.
In the run-up to the payrolls report, data showed jobless claims are settling around some of the lowest levels in the last year amid a low-firing environment.
Friday’s employment report is expected to show hiring moderated last month after a strong reading in January while unemployment held steady.
“The stronger the better given the increase in inflation expectations due to energy prices,” the JPMorgan Market Intelligence desk led by Andrew Tyler said. “A weaker number will increase rate cut expectations, but the risk is stagflation in the near term.”
The S&P 500 lost 0.6%. The yield on 10-year Treasuries climbed three basis points to 4.13%. The dollar added 0.4%.
Fed Bank of Richmond President Tom Barkin said the central bank’s response to the war will depend on how long the impact on the economy lasts.
Swaps priced in less than 40 basis points of rate cuts by year-end, compared with 60 basis points at the end of last week.
Assuming the conflict is resolved over the coming weeks, the spike in oil will likely prove transitory, with Brent trading back down to the forward curve strip price of around $65, according to Chris Senyek at Wolfe Research.
“If the equilibrium for oil settles in higher, there is clearly still upward pressure on the 10-year yield,” he said.
Higher oil prices raise the risk of another breakdown in stock-bond correlations, but bonds can still diversify equity risk, according to Morgan Stanley strategists including Serena Tang.
“If a sustained oil shock could push growth lower and inflation higher, we may see a repeat of the 2021–2023 environment when stocks and bonds sold off together,” they said.
Whether short- or long-duration bonds provide better diversification depends on whether inflation risks or growth concerns dominate going forward, the strategists concluded.
Corporate Highlights:
Oracle Corp. is planning to ax thousands of jobs, among its moves to handle a cash crunch from a massive AI data center expansion effort. Broadcom Inc. Chief Executive Officer Hock Tan said the company expects its AI chip sales to top $100 billion next year. Morgan Stanley is eliminating about 3% of its global workforce, targeting employees in its investment-banking and trading businesses as well as the wealth and asset-management operations. Berkshire Hathaway Inc. CEO Greg Abel said he will use all of his take-home pay to acquire the conglomerate’s stock for as long as he’s in the role. Baker Hughes Co. priced $10 billion of dollar and euro bonds to help fund its acquisition of Chart Industries Inc. What Bloomberg Strategists say…
“Crude’s upswing is exerting upward pressure on yields and, by extension, underpinning the dollar and weighing on equities, reflecting the US’s relatively insulated position as a major net energy exporter amid this latest supply crunch.”
—Brendan Fagan, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.6% as of 4 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 1.6% The MSCI World Index fell 0.6% Currencies
The Bloomberg Dollar Spot Index rose 0.4% The euro fell 0.2% to $1.1610 The British pound was little changed at $1.3365 The Japanese yen fell 0.3% to 157.48 per dollar Cryptocurrencies
Bitcoin fell 2.8% to $71,300.88 Ether fell 2.7% to $2,093.33 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.13% Germany’s 10-year yield advanced nine basis points to 2.84% Britain’s 10-year yield advanced 10 basis points to 4.54% Commodities
West Texas Intermediate crude rose 6.2% to $79.31 a barrel Spot gold fell 1.3% to $5,075.36 an ounce ©2026 Bloomberg L.P.
