Surging oil prices, higher bond yields weigh on stocks

Oil prices skyrocketed on Sep 10, 2022, reaching above $100 a barrel, driven by Yemeni rebels' advances threatening crude supplies after they seized the Red Sea port city of Mocha. Brent crude also surged over 6% to over $107 a barrel, its highest level since May. Major Wall Street indices closed lower, with the S&P 500 dropping 0.6%, marking a fourth consecutive day of decline.

Analysts noted the combination of higher oil prices and rising bond yields, which are weighing on investor sentiment. Long-term US Treasury bond yields climbed, with the 30-year bond hitting a new peak since 2007 at 5.36%. The acceleration in US wholesale inflation, driven by energy prices, further fueled concerns about rising rates.

The European Central Bank raised its benchmark rate to 2.5%, signaling further tightening, while caution lingered ahead of Friday's US inflation report and uncertainty over the Federal Reserve's next move.