Global markets slide as US-Iran tensions lift oil, bond yields

November Brent crude climbed 2.5% to $109.60 a barrel as hopes for a short-term US-Iran agreement weakened. The Strait of Hormuz, a critical energy transit route connecting the Persian Gulf with global markets, remains at the center of investor concerns over potential disruptions to oil supplies.

US government bond yields also remained elevated. The 10-year Treasury yield reached 5.23% on Sept. 25, its highest level since 2007, before holding around 5.21% Monday. The 30-year yield touched 5.53%, the strongest reading since 2004, and stood at 5.51%. The two-year yield increased four basis points to 4.91%.

Higher borrowing costs pressure technology sector

The rise in global bond yields is adding to financing expenses for technology companies investing heavily in artificial intelligence. Analysts expect pressure in fixed-income markets to persist until investors see clearer evidence that financial conditions have tightened sufficiently.

The US Dollar Index was 0.1% higher at 101.1, while gold fell 2.1% to $4,196 an ounce. Money-market pricing indicated a 68% probability of a Federal Reserve rate increase in October, reflecting continued uncertainty over inflation and monetary policy.

US-China trade deal and economic data in focus

Markets are also assessing the economic implications of the latest US-China engagement. Following Chinese President Xi Jinping’s Sept. 23-25 visit to the US, the White House said Washington and Beijing had agreed to lower tariffs on $30 billion worth of non-sensitive products traded between the two countries.

Investors are now awaiting a series of US economic indicators, including growth, nonfarm payrolls and personal consumption figures, as they seek clearer evidence about the trajectory of inflation and economic activity.

Wall Street turns lower after last week's gains

US stocks finished higher on Sept. 25 as hopes for progress in the Middle East reduced concerns over energy supplies and technology shares strengthened. The Dow Jones Industrial Average advanced 0.93%, while the S&P 500 added 0.51% and the Nasdaq Composite gained 0.48%. US indexes, however, opened lower Monday.

Microsoft shares rose 3.6% after the company unveiled additional capabilities for its Copilot chatbot, including a coding function and an autonomous artificial intelligence agent called “Autopilot.” Akamai Technologies gained 3.2% following the announcement of an $11.6 billion, multi-year agreement with Anthropic.

Meanwhile, the University of Michigan's September consumer sentiment reading was revised upward to 48.1. US durable goods orders were unchanged, contrary to forecasts for a decline.

European gains contrast with Asian selloff

European equities were mostly positive on Sept. 25, supported by banking, mining and technology stocks. Germany's DAX 40 rose 0.56%, Italy's FTSE MIB 30 gained 0.63% and the UK's FTSE 100 increased 0.14%. France's CAC 40 edged down 0.04%.

Asian markets moved in the opposite direction toward Monday's close. China's industrial profits rose 4.2% in August, marking their slowest monthly growth rate of the year. Japan's Nikkei 225 slipped 0.1%, South Korea's Kospi fell 2.1% and the Shanghai Composite declined 1.7%, while Hong Kong's Hang Seng Index gained 0.6%.