Oil, Treasury yields turn higher as stocks falter

On September 9, Wall Street finished lower, with oil prices remaining above $100 a barrel. The ongoing Gulf tensions and inflation concerns troubled investors. The Dow Jones Industrial Average fell by 0.77%, the S&P 500 dropped 0.48%, and the Nasdaq Composite lost 0.64%. Global stocks were also down 0.52% following the U.S. market close.

Oil prices surged past $100 a barrel for the first time since July after Iran attacked 10 ships near the Strait of Hormuz following the U.S. sinking of five Iranian oil tankers. Brent crude and U.S. West Texas Intermediate crude both hit their highest closing prices since May. Meanwhile, yields on the benchmark U.S. 10-year notes increased 3.66 basis points to 4.841%, the highest since November 2023, due to the Treasury Department's decision to purchase up to $6 billion in 10-to-20-year government bonds.

Analysts had anticipated a larger purchase to support longer duration bonds. The euro rose ahead of the European Central Bank's policy decision, with markets anticipating a rate hike due to inflationary pressures from the Iran war. The yen strengthened near a seven-month high against the dollar as traders exited short positions.

Gold prices increased by 0.98% to approximately $4,396 an ounce. The latest survey of economists indicated that around 70% expected the Federal Reserve to maintain rates steady at the upcoming September meeting, lower than the 90% expectation in August.