A rally in stocks came to a halt and global bonds fell as mounting attacks on tankers in the Middle East pushed oil prices higher.
Futures for the S&P 500 stood pat after the index hit a record high. Nasdaq 100 contracts dipped 0.4%. Europe’s Stoxx 600 ended a three-day run of gains. Memory giant SK Hynix Inc. was a major underperformer in Asia, sliding nearly 3% ahead of a lockup expiry on its American depositary receipts.
The pickup in attacks by Iran on vessels in the Strait of Hormuz dampened optimism just as shipments through the waterway were approaching prewar levels, lifting Brent crude above $101 a barrel. Ten-year Treasury yields topped 5.30% as Tuesday’s rebound fizzled. The premium in 10-year French yields over their German counterparts widened to 138 basis points.
Meanwhile, the dollar resumed gains on rising yields and haven demand. The euro traded near its lowest against the greenback since May 2025. Bitcoin fell the most in a week, while gold dipped below $4,130 an ounce.
Markets remain unsettled as energy prices and inflation expectations keep yields near multidecade highs. Traders are now looking to the earnings season to see whether profits can support valuations despite macro headwinds and whether the artificial-intelligence boom still has plenty of legs.
“It’s the period before earnings when there’s a bit of a lull, so markets can be pushed around easily,” said Guy Miller at Zurich Insurance. “The focus point is still around bond yields. There was relief yesterday but let’s be clear, nothing fundamental has changed.”
Soaring bond yields have left governments that amassed too much debt · under mounting budget pressure, according to International Monetary Fund Managing Director Kristalina Georgieva, calling advanced economies the “worst offenders.”
Meanwhile, Treasuries will face a key test on Wednesday with a $39 billion auction of 10-year notes as the yield trades near its highest since 2002.
Traders will also parse minutes of the Federal Reserve’s September meeting. With policymakers’ projections showing more members supporting two hikes this year, ING strategist Francesco Pesole said the scope for a dovish surprise was limited.
“Data has been softish since the September hike and markets continue to firmly price a December move, setting a relatively high bar for a positive dollar reaction,” Pesole said.
What Bloomberg Strategists Say:
“If the seemingly unstoppable rally in equities is being led by the narrative that earnings growth will be large enough to withstand higher interest rates, then that same plot line will continue to keep yields in the ascendant.
— Ven Ram, cross-asset strategist. For more, click here.
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Corporate Highlights:
- Porsche AG · plans to increase prices of its top-end sportscars by an average of 20%, including the introduction of a new model that will sit above the longtime flagship 911 in the lineup, as it seeks to revive flagging profits.
- Elon Musk · ’s SpaceX is in talks with banks and investors to raise $40 billion to buy chips from Nvidia Corp., people familiar with the matter said,
- HSBC Holdings Plc · is planning sweeping job cuts across its UK wealth management business, the Financial Times reported, citing people familiar with the matter.
- Shell Plc · expects to report strong results from energy trading in the third quarter as the Iran conflict continues to drive big swings in prices.
- Apple Inc. · ’s upcoming push into smart home devices will include a doorbell, thermostat and other accessories developed through an unusual partnership with LG Electronics Inc.
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Some of the main moves in markets:
Stocks
- The Stoxx Europe 600 fell 0.5% as of 10:23 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures fell 0.4%
- Futures on the Dow Jones Industrial Average fell 0.1%
- The MSCI Asia Pacific Index fell 0.9%
- The MSCI Emerging Markets Index fell 0.9%
Currencies
- The Bloomberg Dollar Spot Index rose 0.3%
- The euro fell 0.6% to $1.1192
- The Japanese yen was little changed at 158.23 per dollar
- The offshore yuan was little changed at 6.7063 per dollar
- The British pound fell 0.3% to $1.3235
Cryptocurrencies
- Bitcoin fell 2.1% to $83,792.51
- Ether fell 3.5% to $2,604.44
Bonds
- The yield on 10-year Treasuries advanced four basis points to 5.32%
- Germany’s 10-year yield advanced one basis point to 3.49%
- Britain’s 10-year yield advanced six basis points to 5.43%
Commodities
- Brent crude rose 1% to $101.60 a barrel
- Spot gold fell 1% to $4,121.77 an ounce
This story was produced with the assistance of Bloomberg Automation.