Stocks Slide as Bond Selloff Drains Risk Appetite – Europe Market Wrap
Tech stocks drove declines in global equities as long-dated bond yields pushed further into multidecade highs and oil prices extended their climb, draining traders’ appetite for risky assets.
The S&P 500 headed for a third straight day of losses as index futures retreated 0.4%. Yields on 30-year government bonds continued to climb across the world, with those on Treasuries up 2 bps to 5.33%, the highest since 2007. US crude neared $85 a barrel as tensions in the Middle East showed no sign of easing. The Dollar was little changed while gold declined.
August’s rebound in chipmakers faltered in premarket trading, with an exchange-traded fund tracking semiconductor stocks sliding 3.2%. Nasdaq 100 futures fell 1.1%. Nvidia dropped 1.9% as the cost of protecting its debt against default closed in on a high reached last month.
Equity markets are struggling under the weight of rising borrowing costs as bond investors demand higher premiums to finance spendthrift governments and shield against persistently sticky inflation. Elevated oil prices have also reinforced expectations that central banks will need to tighten monetary policy.
In Europe, French 30-year yields hit their highest since 2008, while their UK peers were approaching 6%. Germany paid the highest rate since 2011 in a major sale of long-dated debt. The Stoxx 600 headed for a fifth straight day of losses, the longest such stretch this year.
