Oil Price Surge Pressures Bond Yields Ahead of Fed Decision

Rising oil prices have put pressure on long-term bond yields and impacted stock markets ahead of the Federal Reserve's September policy meeting. Brent crude futures are up nearly 2.5% to $107.20 a barrel, while WTI crude futures trade at $102.49 per barrel.

The U.S. 10-year Treasury yield has hit 2007 levels, trading at 4.977%, and the U.S. 30-year Treasury yield touched levels last seen in 2002, trading at 5.367%. Traders are pricing in an 86.5% chance of a rate hike by a quarter-percentage point in September.

U.S. stock futures declined overnight as concerns over AI development and rising oil prices weighed on markets. The Dow futures fell 0.04%, the S&P 500 fell 0.42%, and the Nasdaq-100 fell 1.11%.