Lower Oil Prices Bring Relief to Stock and Bond Markets
Oil prices fell again on Tuesday, providing some relief to investors in the stock and bond markets. The S&P 500 rose 0.3%, edging closer to its all-time high set earlier this month. The Dow Jones Industrial Average added 160 points, or 0.3%, while the Nasdaq composite climbed 0.7%.
The decline in oil prices was driven by a drop in Brent crude to $87.27, a 3.6% decrease from Monday's close. This comes despite increased tensions between the US and Iran following new sanctions announced by the Trump administration.
However, hopes for a deal between the two nations that would allow oil tankers to freely exit the Persian Gulf have caused Brent's price to zigzag between $72 and $102 in recent weeks.
The decline in oil prices helped ease worries about high inflation, which had driven Treasury yields higher in the bond market through the summer. The yield on the 10-year Treasury fell to 4.63% from 4.70% late Monday.