Oil Price Surge and Higher Bond Yields Weigh on Global Financial Markets

The global financial markets experienced a downturn on Thursday due to surging oil prices and higher bond yields. The US benchmark oil contract, West Texas Intermediate, jumped above $100 a barrel after Yemen's Houthis seized control of the strategic Red Sea port city of Mocha. This development threatens the flow of crude supplies and has pushed Brent crude to its highest level since May at over $107 a barrel.

The jump in oil prices was accompanied by an increase in long-term US Treasury bond yields, with the 30-year bond reaching 5.36 percent, a new peak since 2007. This acceleration is attributed to producer price inflation numbers showing a 5.4 percent climb in August, driven by energy prices.

Angelo Kourkafas of Edward Jones noted that while it's not the level of yields that's concerning, rather the speed with which rates are increasing. Markets will receive additional US inflation data on Friday with the release of the August consumer price index.