Oil and Yields Still Dominating Market Headlines Despite Rising Tensions

The price of crude oil and Treasury yields continue to rise, dominating market headlines. The MoneyShow Chart of the Day highlights this trend, showing year-to-date percentage changes for WTI crude oil futures (CBZ26), US 10-Year Yield (ZNZ26), and US 30-Year Yield (ZBZ26).

WTI Crude Oil has risen by an impressive 35% so far this year, while yields on the 10-Year Treasury Note and 30-Year Treasury Bond have increased by 2.3% and 2.4%, respectively.

The link between rising oil prices and increasing inflation is well-established. Higher oil prices fuel higher inflation, which in turn fuels upward moves in yields. However, more factors are at play, including massive amounts of money being raised to fund the AI capex boom, leading to a flood of bond supply that's pushing all yields higher.

The Federal Reserve and foreign central banks have also raised short-term rates, contributing to rising costs for borrowing. Furthermore, growing government deficits and debt loads are adding to the upward pressure on yields.