Bonds Vary and Stocks Drop as Brent Reaches $110 – Europe Market Wrap
Stocks sank as the US-Iran deadlock kept oil prices rising, while bonds struggled to find direction following last week’s worldwide sell-off.
S&P 500 futures fell 0.5%, putting the benchmark on track for its first back-to-back losses since May. Brent surpassed $110 per barrel. Japan’s 30-year yield rose as much as 20 basis points before paring most of the gains. Treasuries fluctuated between tiny gains and losses, while European bonds were largely unchanged. The Dollar was set to end a five-day winning streak.
In Europe, consumer and auto shares contributed to a 0.5% drop in the Stoxx 600. UK gilts recovered after a steep selloff last week, as investors considered a prospective leadership challenge by Manchester Mayor Burnham. The 10-year rate fell one basis point to 5.16%, as the Pound rose for the first time in more than a week.
After more than two months, the Middle East conflict shows no signs of abating, punctuating an AI-driven boom that has propelled global stocks to new highs. Meanwhile, bond yields have risen to heights seen decades ago amid fears that central banks will raise interest rates and governments will increase borrowing to offset the impact of rising energy prices.
A shaky ceasefire between the US and Iran has lasted more than 40 days, and a solution to reopen the Strait of Hormuz remains elusive. Trump voiced frustration with Tehran, warning that the “clock is ticking.” Previously, drones struck a nuclear power plant in the UAE.
