The S&P 500 fell for a fourth straight session Thursday as a jump in oil prices above $105 a barrel and hotter-than-expected inflation data reignited a global bond sell-off. Long-term Treasury yields hit their highest level since 2007, and the Dow and Nasdaq slid alongside the S&P 500 in early trading.
Stocks moved in tandem with a fast-moving bond market, as investors weighed the inflation data alongside surging energy costs.
Oil surge and inflation data reignite the bond sell-off
The US 30-year bond yield jumped 0.06 percentage points to 5.35% Thursday, its highest level since 2007. The move came a day after a $6 billion Treasury buyback plan drew a cool response from investors.
Oil added to the pressure. Brent crude, the international benchmark, rose more than 4% to as high as $105.82 a barrel, while West Texas Intermediate jumped 4.4% to climb to about $100 a barrel for the first time since May. Saudi Arabia told OPEC it produced 6.2 million barrels a day in August, 23% lower than in July and the lowest monthly figure in 2026.
Wholesale prices added fuel to the move: the Bureau of Labor Statistics' Producer Price Index rose to a year-on-year rate of 5.4%, from 4.7% a month earlier, a larger increase than Wall Street analysts had expected. Core PPI, which strips out food and energy, rose 0.2% on the month, slightly cooler than estimates, for a 4.6% annual increase in line with forecasts.
According to Pooja Kumra, a rates strategist at TD Securities: "Bonds are facing a double whammy". The European Central Bank added to the pressure, raising rates to 2.5% on Thursday and warning that eurozone inflation would stay "well above" its 2% target for an extended period.
Stocks retreat across the board
Equities moved in tandem with bonds. The S&P 500 fell 0.6% and the Nasdaq 100 dropped 1.3% in early New York trading, while the Stoxx Europe 600 lost 0.6%. The Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 marked their fourth straight session of losses to start Thursday's session, with the Dow shedding 266 points.
Among individual movers, TSMC fell nearly 1% premarket even after posting August revenue of $16.35 billion, up more than 53% from a year earlier, while Nvidia slipped 0.6%. Chevron rallied 1.6%, extending a winning streak, as Amazon and Microsoft each lost 0.8% in premarket action.
A $22 billion auction of 30-year Treasuries later Thursday will test investor appetite for US government debt after the buyback plan's tepid reception.
Sources: Financial Times, Barron's (snippet-based), Investor's Business Daily
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