Stocks Fall as Oil Rally Deepens Bond Selloff: Markets Wrap
(Bloomberg) — US stocks fell as elevated oil prices fueled further selling in Treasuries, pushing the 10-year yield to levels last seen 19 years ago and keeping risk appetite firmly in check.
S&P 500 futures slid 0.5%. The rate on 10-year Treasuries rose four basis points to 5.03%, the highest level since 2007. Brent crude topped $107 a barrel, taking gains for September to nearly 20%. The dollar headed for its first back-to-back advance this month. Bitcoin slipped as hopes faded for imminent progress on a US regulatory bill, sending crypto stocks sharply lower in early trading.
Lofty bond yields are setting the tone for markets, bringing risks from surging 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 could 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.”
Europe’s Stoxx 600 fell 1%. Deutsche Bank AG led losses in banking shares, echoing declines among US peers after Bank of America Corp. warned that trading revenue for the current quarter will be flat.
Yields rose across the region, with the rate on two-year gilts climbing four basis points to 4.93% as traders added to wagers that the Bank of England will raise interest rates at least twice this year.
“Markets are clearly getting nervous, which means any setback can trigger material moves,” noted Padhraic Garvey at ING. “With oil jumping higher every day and European gas trading well beyond previous highs, we see plenty of risks ahead.”
In Japan, selling was concentrated in long-dated bonds as the government considered 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 as rising crude prices reinforced expectations the Federal Reserve may raise rates this week. Higher rates typically diminish the appeal of the non-yielding metal.
What Bloomberg’s Strategists Say…
“The widening divergence between crude oil and gold signals macro traders may have to contend with broken correlations across asset classes for a while longer. They are losing faith in the arrival of a circuit breaker capable of deflating oil prices and restoring appetite for risk across markets.”
— Mark Cranfield, Markets Live strategist. Click here for the full analysis
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 fell 0.8% as of 9:52 a.m. London time S&P 500 futures fell 0.5% Nasdaq 100 futures fell 0.6% Futures on the Dow Jones Industrial Average fell 0.7% The MSCI Asia Pacific Index fell 1% The MSCI Emerging Markets Index fell 1% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1534 The Japanese yen fell 0.4% to 154.99 per dollar The offshore yuan was little changed at 6.7141 per dollar The British pound fell 0.2% to $1.3475 Cryptocurrencies
Bitcoin fell 2.8% to $76,842.17 Ether fell 3.8% to $2,472.45 Bonds
The yield on 10-year Treasuries advanced four basis points to 5.03% Germany’s 10-year yield advanced four basis points to 3.56% Britain’s 10-year yield advanced five basis points to 5.41% Commodities
Brent crude rose 2.1% to $107.87 a barrel Spot gold fell 0.8% to $4,267.18 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling.
©2026 Bloomberg L.P.
