Oil Prices Soar as US-Iran Tensions Ease
The S&P 500 and Nasdaq rebounded from session lows after reports of a potential US-Iran deal lifted Middle East uncertainty, driving oil prices up over 3% to nearly $US107 per barrel.
Brent crude rose sharply following a Houthi missile attack on Saudi Arabia, reviving fears of supply disruptions. This led Bill Northey, senior investment director at US Bank Wealth Management, to comment: 'It's really all about oil and inflation and the effect on interest rates, and then the interest rate cascading across the capital markets.'
The rise in oil prices pushed Treasury yields higher, with the 30-year bond yield reaching its highest since 2004. Higher yields make safe-haven Treasuries relatively more attractive to investors than stocks with uncertain returns.