Stocks, Bonds Fall as Oil Jumps on US-Iran Jitters: Markets Wrap
(Bloomberg) — A surge in oil prices rippled through global markets, hitting stocks and bonds on worries that higher energy costs will fuel inflation and force the Federal Reserve to boost rates.
West Texas Intermediate crude topped $90 as fighting between the US and Iran escalated, raising concern about further disruptions in Strait of Hormuz flows. Those risks lifted global yields to the highest since 2008, reducing the appetite for equities at the start of a seasonally weak month. The S&P 500 lost 0.7%, also dragged down by a rout in chipmakers.
President Donald Trump said the US strikes were in retaliation for Iran trying to put mines in the strait and for an earlier attack on a military base in Jordan. He warned of more strikes to come if Tehran responded.
The exchanges followed weeks of relative calm, during which the Trump administration said it was pivoting from military action to applying economic measures to pressure Tehran. Both sides have shown little inclination to resume talks since the collapse of an interim peace deal.
“Higher oil prices are threatening to reignite inflation, raising the risks of tighter monetary policy,” said Fawad Razaqzada at Forex.com. “Also unnerving investors is the continued rise in global bond yields – which kind of goes hand in hand with oil prices.”
Investors are demanding greater compensation to hold bonds as concerns about inflation, government spending and corporate borrowing to finance the artificial-intelligence buildout intensify. Against this backdrop, money markets see a Fed hike as more likely than not in September.
“The stock market has been able to ignore these moves so far this year,” said Matt Maley at Miller Tabak. “However, as we have seen in the past, higher yields don’t matter for stocks until they do.”
Expectations for a rate hike increased last week after Fed Chair Kevin Warsh warned inflation wasn’t slowing meaningfully, saying officials would need to act if price pressures don’t ease soon.
“Warsh will be attentive to the impact that higher oil has on inflation compensation across all horizons and on bond yields,” said Krishna Guha at Evercore. “A single Fed hike would have a trivial effect on longer-term yields and even two or three may not have much impact.”
But pressure on yields will push Warsh to require a more clear-cut signal from the data that it is reasonable to pass on a September hike, he added.
Corporate Highlights:
Dell Technologies Inc. cranked up its annual sales forecast by $25 billion, exceeding analysts’ estimates in a further signal of surging demand for servers to run artificial intelligence tasks. Apple Inc. Chief Executive Officer John Ternus touted the company’s strong product pipeline and teased a “phenomenal” iPhone launch next week in his first remarks to employees as their new leader. Anthropic PBC is releasing a new version of its powerful Fable AI model that it says is better at coding and science tasks, as well as more economical — all changes it says are in response to customer feedback. S&P Global Inc. is considering spinning out its flagship data and research platform Capital IQ Pro, in a move that could create a standalone firm worth billions of dollars. GoPro Inc. soared after the action camera maker entered into a definitive merger agreement with privately held company Starman Optical Inc. Chevron Corp. is finalizing a deal that will significantly expand its operations in Venezuela by adding two giant oil fields in the Orinoco Belt, part of a push by Trump to ramp up production in the South American country. What Bloomberg strategists say…
“Rates volatility is generally well-contained; that matters, because most of the significant downdrafts in stock prices over the past few years have coincided with spikes in rate vol.”
—Cameron Crise, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.7% as of 4 p.m. New York time The Nasdaq 100 fell 1.3% The Dow Jones Industrial Average fell 0.8% The MSCI World Index fell 0.7% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1589 The British pound fell 0.3% to $1.3512 The Japanese yen fell 0.3% to 160.22 per dollar Cryptocurrencies
Bitcoin fell 2% to $77,247.48 Ether fell 2.4% to $2,412.93 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.79% Germany’s 10-year yield advanced two basis points to 3.34% Britain’s 10-year yield advanced 16 basis points to 5.22% Commodities
West Texas Intermediate crude rose 5.9% to $90.82 a barrel Spot gold fell 2.4% to $4,330.08 an ounce ©2026 Bloomberg L.P.
