U.S. stocks open in the red as oil prices surge, bond rout powers on

U.S. stocks opened lower on Thursday as oil prices rose sharply and global bond markets continued their downward spiral. The S&P 500, NASDAQ Composite, and Dow Jones Industrial Average all closed in the red on Wednesday, marking the end of their winning streaks. Analysts at Deutsche Bank noted that the sell-off in U.S. Treasuries has also affected European markets, with the yield difference between French and German 10-year bonds reaching its highest level since the COVID-19 pandemic.

Brent crude prices surpassed $104 a barrel after attacks on oil tankers in the Strait of Hormuz and strikes on critical infrastructure in Saudi Arabia by Iran-backed Houthis. Speculation surrounding a potential U.S. military response to Iran's actions, led by President Donald Trump, added to market uncertainty. Additionally, investors are closely monitoring the sustainability of the ongoing AI investment cycle, with several financing deals in the works to support the burgeoning technology sector.

Companies like Applied Digital experienced a boost in their stock prices due to strong demand in the AI sector, while Samsung Electronics reported its strongest third-quarter profit ever, driven by high demand for memory chips in AI applications. However, analysts cautioned that the rapid growth in AI-linked debt may prevent Treasury yields from falling anytime soon.

Meanwhile, individual stocks such as PepsiCo saw modest increases in their share prices following better-than-expected earnings reports, but some analysts lowered their full-year profit outlook.