Stocks fall on soaring bond yields, higher oil prices ~ EconomyLens.com

New York (AFP) – Stock markets fell Wednesday as oil prices rose sharply and US bond yields jumped on inflation fears, with world leaders at the UN General Assembly offering little to suggest progress in ending turmoil in the Middle East. After several sessions of falls, the price of North Sea Brent crude rose 3.86 percent to $103.08 per barrel, and West Texas Intermediate (WTI) crude gained 1.81 percent to reach $92.16 per barrel. The benchmark US 10-year Treasury yield rose to 5.11 percent — its highest level since 2007.

Iranian President Masoud Pezeshkian struck a defiant tone at the UN, vowing Tehran would never “bend at the knee” to the United States as their stalled war drags on. On Tuesday, President Donald Trump had told the UN that he was weighing whether to “annihilate” Iran but went on to hail renewed talks with Tehran. On Wall Street on Wednesday, the Dow Jones fell 0.68 percent, and the broader S&P 500 slid 0.75 percent while the Nasdaq shed 1.13 percent.

The US Federal Reserve lifted borrowing costs last week, providing relief to traders concerned that policymakers were not moving quickly enough to address a spike in inflation. Treasury yields are rising and stocks falling as “there is now the notion that the Fed will continue to hike rates, not one and done,” Angelo Kourkafas of Edward Jones told AFP. “Part of the reason is also there’s no clear off-ramp in regards to the energy markets; the UN comments today and the headlines coming out of it have not necessarily helped the sentiment around geopolitical risks.”

Hopes for a deal to get Gulf oil and gas flowing freely through the Strait of Hormuz as global leaders gathered in New York had sent oil prices down in recent sessions. John Kilduff of Again Capital told AFP that “we’re taking back some of the enthusiasm from yesterday about the meeting between Iran and the US.” He noted that “there wasn’t necessarily all that much substance to what occurred.”

“A sudden spike in the oil price caught investors off guard and reminded them not to be complacent about inflationary pressures,” said Dan Coatsworth, head of markets at AJ Bell. The OECD on Wednesday said that global economic growth had been “resilient” in many countries despite the war, as it slightly raised its economic output forecasts for 2026.

European stocks lost ground, with Frankfurt closing 0.7 percent down and Paris losing almost half a percent, while London finished flat. Asian indices also pulled back, with Hong Kong closing down one percent, shrugging off an announcement by Chinese tech giant Alibaba that it would expand its overseas data centers, and Shanghai lost 0.4 percent. South Korea’s tech-rich Kospi and Taiwan’s Taiex index — home to chipmaking titan TSMC — gained nearly one percent.