Rising Yields and Oil Prices Weigh Heavily on US Stocks
US stocks fell across the board on Thursday as rising Treasury yields and surging oil prices put pressure on equities. The 10-year yield increased to its highest level since October 2023, reaching 4.9545%, up 11.8 basis points from the previous day.
The jump in borrowing costs weighed heavily on small-cap and tech stocks, while higher oil prices above $100 per barrel added to inflation concerns. Oil's move above this threshold for the first time since mid-May has sparked worries that it will lift headline inflation and squeeze corporate margins.
The US PPI data came in close to expectations on a month-over-month basis but still showed producer inflation running well above the Fed's 2% target. The persistently high yearly inflation rates kept inflation concerns firmly in place, with bond traders focusing on these readings and sending Treasury yields sharply higher.