Stock markets: Wall Street down. Oil prices soar at the close in New York
Crude oil prices continue to rise, with Brent trading above $108 a barrel. The market is expecting the US central bank to raise interest rates
(Il Sole 24 Ore Radiocor) - Oil prices soared at the close of trading in New York, up 4.41 per cent. WTI crude settled at $105.50 per barrel, whilst Brent settled at $108.50.
It was a volatile session, however, for the European stock markets, which continue to navigate choppy waters, caught between pressure on energy prices and government bonds, against the backdrop of the Fed and growing expectations of monetary tightening. Oil, after a brief respite, has resumed its upward surge (following yesterday’s spike to just under $110), whilst tensions in the Middle East show little sign of easing. Gas prices, on the other hand, have reversed course (falling below 80 euros) after the Kremlin described US President Donald Trump’s proposal for a mutual ceasefire between Kyiv and Moscow regarding attacks on energy infrastructure as a ‘good idea’.
The pressure on bonds shows no sign of easing either: the Treasury yield remains above the psychological threshold of 5 per cent and has surpassed its 2023 peak (5.04 per cent), reaching its highest level since 2007. This is heightening tension ahead of the interest rate decision by the Federal Reserve, scheduled for tomorrow. Investors are anticipating a rise in the cost of borrowing for the first time since July 2023. Attention is therefore focused on the press conference by Chairman Kevin Warsh. “However, we do not expect any explicit guidance on the future outlook,” says Jens Bies of Helaba Invest, noting that “in the absence of extremely hawkish signals, some rate rises may be priced out of the market, allowing US Treasuries to recover from their high yield levels”.
Against this backdrop, the FTSE MIB in Milan closed down 0.14%
Wall Street down, Treasury yields surge
Wall Street closes lower. The Dow Jones falls by 0.63 per cent to 52,092.57 points, the Nasdaq drops by 0.78 per cent to 25,981.57 points, whilst the S&P 500 fell by 0.45 per cent to 7,585.68 points. This was driven by the surge in yields on Treasury bonds to multi-year highs. The yield on the benchmark 10-year Treasury bond rose to its highest level since 2007, reaching 5.041 per cent. In recent weeks, global government bond yields have been the focus of attention on the equity markets, with sales of government debt falling due to growing fears that the ongoing conflict between the United States and Iran could fuel inflation and prompt a shift towards tighter monetary policy by central banks.
