Stocks Rally Despite Bond Sell-Off and Oil Price Drop

Global stock markets mostly rose on Friday after a recent bond sell-off and decline in oil prices. The US Treasury yields reached their highest levels in years, with the 10-year yield easing slightly to around 5.17% early in the day.

The S&P 500 futures increased by 0.3%, while Dow Jones Industrial Average futures also gained 0.3%. In early European trading, Britain's FTSE 100 climbed 0.5%, France's CAC 40 rose 0.5%, and Germany's DAX advanced 1%.

Japan's Nikkei 225 gained 1.3%, while Hong Kong's Hang Seng slipped 1%. Australia's S&P/ASX 200 fell 0.4%, and India's Sensex was up 0.3%. Markets in mainland China, Taiwan, and South Korea were closed due to a holiday.

The global bond sell-off has added pressure on the stock market, with investors demanding higher compensation for the increased risks and uncertainties, including growing inflationary pressures from the Iran war-driven energy shock and rising US government debt. ING Bank analysts stated that factors like elevated energy prices and inflation pressures are likely to continue to pressure US 10-year Treasury yields higher.

Oil prices fell early in the day as investors look for signs of the reopening of the Strait of Hormuz, a key waterway for global oil transport. Brent crude dropped 1.7% to $98.52 per barrel, remaining below the $100 mark but still above the roughly $72 a barrel level in late February before the start of the war.