Global Equities Pause Amid Rising Oil Prices and Higher Treasury Yields

Global equities paused on Wednesday after a four-day winning streak, with Intel INTC, AMD, and Broadcom AVGO shares down by 2% each. The Philadelphia Semiconductor Index also declined around 1.4%. Rising oil prices and higher Treasury yields weighed on investor sentiment, as Brent crude futures for November delivery rose 2% to about $101 a barrel, while US West Texas Intermediate crude futures gained 1% to around $91.

Treasury yields moved sharply higher after strong purchasing managers' index readings pointed to resilient US economic activity. The 10-year Treasury yield reached 5.058%, its highest level since July 2007, while the two-year yield gained almost 10 basis points to 4.874%. Higher oil prices can feed into broader inflation pressures, potentially forcing central banks to maintain or intensify restrictive monetary policy.

Federal Reserve Governor Michael Barr added to the hawkish tone on Wednesday, saying the central bank had taken an important step last week to 'recalibrate' short-term borrowing costs to bring down inflation and would likely need to deliver further interest-rate increases. He stated that inflation remains above the Fed's 2% target and is not clearly moving toward it quickly enough.

Broadcom AVGO also declined as investors digested a Financial Times report that Chinese authorities are examining the company's hardware deployments in state-backed data centres. According to the report, the State-owned Assets Supervision and Administration Commission has been surveying the extent to which Broadcom switches are used across state-controlled data centres.