Oil Price Decline Brings Relief to US Stock Market

A cooldown in oil prices is providing some relief to the US stock and bond markets, which have been under pressure from rising yields. The S&P 500 rose 0.1% on Friday, ending a three-day losing streak marked by big swings caused by bond market volatility. Brent crude oil fell 2% towards $98 a barrel, while the price of oil has been fluctuating due to uncertainty about when the war with Iran will allow oil to flow freely again.

The Dow Jones Industrial Average edged up 80 points, and the Nasdaq composite rose 0.2%. The US Treasury yields have been elevated as investors demand higher compensation for the increasing risks and uncertainties in the market. The yield on the U.S. 10-year Treasury reached its highest level since 2007, but eased slightly to around 5.18% on Friday.

ING Bank analysts predict that factors including energy prices and inflation pressures will continue to pressure US 10-year Treasury yields higher. Oil prices declined as investors look for signs of the reopening of the Strait of Hormuz, a key waterway for global oil transport. The meeting between US President Donald Trump and Chinese President Xi Jinping has also been closely watched, but analysts say limited concrete progress has been made.