U.S. Markets Plummet as Inflation Concerns Soar Amid Trump-Xi Summit

U.S. markets declined on Wednesday due to inflation concerns as the 10-year Treasury yield soared to its highest level since July 2007, closing at 5.11%. This surge in bond yields was driven by rising inflation concerns after S&P Global reported that its flash U.S. Composite PMI Output Index rose from 56.0 in August to 58.4 this month, the highest level since July 2021.

Chris Williamson, chief business economist at S&P Global Market Intelligence, noted that the September surge in business activity was the strongest since early 2015 but warned of severe supply-chain constraints. He added that input costs rose at their fastest pace in four years, driven by higher fuel and transportation expenses linked to rising oil prices.

The U.S. Treasury yield is now approaching a potential inflection point, with some analysts warning of a possible rise above 6%. Oil prices also climbed on Wednesday, adding to inflation worries. Brent crude futures expiring in November traded at $102.22 per barrel, while WTI crude futures expiring in November traded at $91.52 per barrel.

Meanwhile, Chinese President Xi Jinping arrived in the U.S. for a high-stakes meeting with Trump, where AI is expected to feature prominently. The guest list includes prominent tech and business leaders, including Microsoft's Satya Nadella, Apple Executive Chairman Tim Cook, and Alphabet CEO Sundar Pichai.

Trending stocks include Meta Platforms Inc., Alphabet Inc., McDonald's Corp., and Unity Software Inc., which gained over 5% in the overnight session due to its role as a supported engine for Meta's VR platforms.