Stocks Under Pressure as Yields Offset AI Gains: Markets Wrap
(Bloomberg) — US stocks struggled for direction as a global selloff in bonds gathered pace and oil renewed its climb, countering an advance in the artificial-intelligence trade.
S&P 500 futures erased an advance of as much as 0.7% that followed an upbeat forecast from Micron Technology Inc. Europe’s Stoxx 600 hit the lowest level since June, with the UK’s FTSE 100 down 1.8%. Bond yields touched fresh multidecade highs. The 10-year Treasury rate reached its highest since 2002, while the yield on 30-year gilts topped 6% for the first time since 1998.
Brent advanced above $100 a barrel in a choppy session as traders weighed an increase in flows from the Middle East against the possibility of further escalation. The dollar headed for a three-month high. Gold was little changed.
Oil is setting the tone for markets at a time when inflation fears are prompting central banks to hike interest rates. US bond volatility surged to a six-month high after global debt markets suffered their worst quarter since 2024, sending the average government yield above 4% for the first time since 2007.
“While the surge in bond yields itself is primarily a function of strong macro data in the US, it still has negative repercussions for equity markets,” said Wolf von Rotberg at Bank J Safra Sarasin. “Momentum has collapsed outside the tech sector, as the pain threshold for valuations has been crossed.”
The AI trade remained a bright spot as Nasdaq 100 futures climbed 0.4%. Micron and its memory peers continue to be inundated with orders as hundreds of billions of dollars pour into the global AI infrastructure.
Elsewhere in tech, Alphabet Inc. rose in premarket trading after beginning to roll out its long-awaited flagship AI model. In another sign of strong demand for the picks and shovels of the AI buildout, Tencent Holdings Ltd. signed an estimated $7 billion lease deal with cloud provider Oracle Corp., the Financial Times reported.
“Demand is still strong,” said Andrea Gabellone, head of global equities at KBC Securities. “Micron’s outlook has proven that for instance the memory trade has still room to go.”
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 1.3% as of 9:51 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures rose 0.4% Futures on the Dow Jones Industrial Average fell 0.4% The MSCI Asia Pacific Index was little changed The MSCI Emerging Markets Index rose 0.1% Currencies
The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.3% to $1.1294 The Japanese yen fell 0.6% to 158.36 per dollar The offshore yuan fell 0.2% to 6.7192 per dollar The British pound fell 0.3% to $1.3222 Cryptocurrencies
Bitcoin fell 0.3% to $83,396.79 Ether was little changed at $2,681.73 Bonds
The yield on 10-year Treasuries advanced four basis points to 5.32% Germany’s 10-year yield advanced two basis points to 3.61% Britain’s 10-year yield advanced five basis points to 5.47% Commodities
Brent crude rose 2.5% to $100.44 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
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