Stocks Slip as Oil Rally Keeps Bonds Under Strain: Markets Wrap
(Bloomberg) — US stocks edged lower as elevated oil prices piled fresh pressure on Treasuries, pushing the 10-year yield to levels last seen 19 years ago and keeping risk appetite in check.
S&P 500 futures fell 0.1%. The yield on 10-year Treasuries rose as much as four basis points before trimming the move. Brent crude climbed toward $107 a barrel, extending gains for September to 18%. The dollar headed for a back-to-back advance. Bitcoin slipped as hopes faded for imminent progress on a US regulatory bill, sending crypto stocks lower in premarket trading.
Lofty bond yields are setting the tone for markets, placing elevated energy costs and mounting debt firmly on traders’ radar. Enthusiasm for the AI trade, the major driver of equity gains this year, also remains tempered as debate rages over whether the technology may inflict catastrophic harm.
“Of course the bond selloff is weighing on tech and growth stocks,” said Louis Puga at Societe de Gestion Prevoir. “There are really two worlds at play here: on one side healthy corporate balance sheets and profits, and on the other side countries running big deficits and putting pressure on the bond market.”
The weakness in bond markets raises the stakes ahead of the Fed’s rate decision, for which traders are pricing more than a 90% chance of a hike. If officials hold off, or signal a shallower-than-expected path of tightening, investors may demand even higher yields as protection against inflation.
“After years of inflation overshooting target, the Fed’s credibility is under scrutiny,” wrote Jenny Zeng at Allianz Global Investors. Warsh’s “recent comments leave little doubt that restoring price stability remains the priority. September is the meeting where that commitment is put to the test.”
Europe’s Stoxx 600 fell 0.2%. Deutsche Bank AG slipped 1.9%, echoing declines among US peers after Bank of America Corp. warned that trading revenue for the current quarter will be flat. Regional bonds were mixed.
“Different risk premiums are piling up on the bond market,” said Mabrouk Chetouane at Natixis Investment Managers. “With that backdrop, equity markets are no longer rising but stalling. For markets to bounce from here, we would need both some kind of visibility from the Fed tomorrow and solid third-quarter earnings.”
In Japan, selling was concentrated in long-dated bonds as the government considered setting a mid-term defense spending target of 3.5% of GDP. MSCI Inc.’s equity benchmark for Asia declined for a fourth straight day, its longest losing streak since May, with about three out of every four stocks falling.
Gold slipped further below $4,300 an ounce ahead of Wednesday’s US rates meeting. Higher rates typically diminish the appeal of the non-yielding metal.
What Bloomberg’s Strategists Say…
“Treasury yields are closing in on an inflection point where, historically, stocks and bonds have mutually amplified portfolio risk. That points to a regime shift of higher bond and stock volatility and wider credit spreads.”
Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 8:29 a.m. New York time Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average fell 0.3% The Stoxx Europe 600 fell 0.2% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro was little changed at $1.1542 The British pound fell 0.1% to $1.3482 The Japanese yen fell 0.4% to 155.01 per dollar Cryptocurrencies
Bitcoin fell 2.8% to $76,878.79 Ether fell 3.6% to $2,477.29 Bonds
The yield on 10-year Treasuries advanced two basis points to 5.01% Germany’s 10-year yield advanced two basis points to 3.54% Britain’s 10-year yield advanced two basis points to 5.38% Commodities
West Texas Intermediate crude rose 1.6% to $103.02 a barrel Spot gold fell 0.5% to $4,276.89 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling.
©2026 Bloomberg L.P.
