A rally in stocks faded and global bonds fell as an escalation in attacks on tankers in the Middle East pushed oil prices higher.
S&P 500 futures dropped 0.3% after the index closed at a record high. Nasdaq 100 contracts slid 0.7%, with chipmakers losing ground in early trading. A pickup in attacks by Iran on vessels in the Strait of Hormuz dampened optimism at a time when shipments through the waterway were approaching prewar levels, lifting Brent toward $102 a barrel.
Ten-year Treasury yields topped 5.30% again ahead of a $39 billion auction in the maturity. A rebound in French debt also fizzled, widening the premium in the country’s 10-year yields over their German counterparts by 12 basis points to 139 basis points.
The slide in bond markets came just as International Monetary Fund Managing Director Kristalina Georgieva warned that soaring yields have left governments that have amassed too much debt · under mounting budget pressure, calling advanced economies the “worst offenders.”
While most major economies face fiscal constraints, France is exemplifying how political gridlock can leave governments little scope to address them, said Emma Moriarty at CG Asset Management.
“Bond markets really worry about the outlook for fiscal policy, but the political reality is that the people on the ground are not ready to accept that,” she said.
As markets remain unsettled, traders are now looking to the upcoming 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.”
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 toward $4,120 an ounce.
The release of the Federal Reserve’s September meeting minutes later today will be a key focus. 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:
- 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, in what would be among the biggest-ever debt financings for the AI buildout.
- 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.
- 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
- S&P 500 futures fell 0.3% as of 7:06 a.m. New York time
- Nasdaq 100 futures fell 0.7%
- Futures on the Dow Jones Industrial Average fell 0.5%
- The Stoxx Europe 600 fell 1%
- The MSCI World Index fell 0.3%
Currencies
- The Bloomberg Dollar Spot Index rose 0.3%
- The euro fell 0.6% to $1.1192
- The British pound fell 0.4% to $1.3220
- The Japanese yen fell 0.1% to 158.30 per dollar
Cryptocurrencies
- Bitcoin fell 2.2% to $83,725.59
- Ether fell 4.5% to $2,577.45
Bonds
- The yield on 10-year Treasuries advanced five basis points to 5.33%
- Germany’s 10-year yield advanced three basis points to 3.51%
- Britain’s 10-year yield advanced nine basis points to 5.47%
Commodities
- West Texas Intermediate crude rose 0.5% to $89.92 a barrel
- Spot gold fell 1.1% to $4,119.63 an ounce
This story was produced with the assistance of Bloomberg Automation.