NEW YORK: Stock markets fell Wednesday (Sep 23) as oil prices rose sharply and US bond yields jumped on inflation fears, with world leaders at the UN General Assembly offering little to suggest progress in ending turmoil in the Middle East.
After several sessions of falls, the price of North Sea Brent crude rose 3.86 per cent to US$103.08 per barrel and West Texas Intermediate (WTI) crude gained 1.81 per cent to reach $92.16 per barrel.
The benchmark US 10-year Treasury yield rose to 5.11 per cent – its highest level since 2007.
Iranian President Masoud Pezeshkian struck a defiant tone at the UN, vowing Tehran would never “bend at the knee” to the United States as their stalled war drags on.
On Tuesday, US President Donald Trump had told the UN that he was weighing whether to “annihilate” Iran but went on to hail renewed talks with Tehran.
On Wall Street on Wednesday, the Dow Jones fell 0.68 per cent and the broader S&P 500 slid 0.75 per cent while the Nasdaq shed 1.13 per cent.
The US Federal Reserve lifted borrowing costs last week, providing relief to traders concerned that policymakers were not moving quickly enough to address a spike in inflation.
Treasury yields are rising and stocks falling as “there is now the notion that the Fed will continue to hike rates, not one and done,” Angelo Kourkafas, of Edward Jones, told AFP.
“Part of the reason is also there’s no clear off-ramp in regards to the energy markets, the UN comments today and the headlines coming out of it have not necessarily helped the sentiment around geopolitical risks.”
Hopes for a deal to get Gulf oil and gas flowing freely through the Strait of Hormuz as global leaders gathered in New York had sent oil prices down in recent sessions.
