Dow Jones plunges 400 points! Bond yields surge – oil surpasses $100, pressuring global stock markets.
U.S., European, and UK stock markets fell on Wednesday (September 9, 2569) after U.S. bond yields surged and oil prices soared above $100 per barrel amid tensions between the U.S. and Iran. Investors also held back on investments awaiting U.S. inflation data to be released this week.
U.S. stock markets continued to fall, the Dow Jones plunged 400 points, and bond yields surged.
U.S. stock markets closed lower on Wednesday, with major indices falling for a third consecutive day, after U.S. bond yields rose and oil prices surged above $100 per barrel amid concerns about inflation and the ongoing conflict between the U.S. and Iran.
- Dow Jones Industrial Average Closed at 52,380.66 points, down 405.41 points (-0.77%)
- S&P 500 Index Closed at 7,636.36 points, down 37.16 points (-0.48%)
- Nasdaq Composite Index Closed at 26,253.34 points, down 168.073 points (-0.64%)
Pressure on the market increased after the yield on 10-year U.S. Treasury bonds surged to 4.857%, its highest level since November 2023, following the U.S. Treasury's announcement that it would increase its repurchase program for long-term bonds to $6 billion, or three times the normal level. Investors are also watching for the Producer Price Index (PPI) report on Thursday and the Consumer Price Index (CPI) report on Friday to assess the Federal Reserve's (Fed) interest rate direction.
European stock markets closed lower amid concerns over rising inflation and energy prices.
European stock markets closed lower on Wednesday, as investors worried that oil prices soaring above $100 per barrel could increase inflationary pressure and affect monetary policy. The ongoing conflict in the Middle East also continued to weigh on the markets.
- STOXX 600 Index Closed at 640.41 points, down 9.19 points (-1.41%)
- DAX German stock market index Closed at 25,576.45 points, down 431.18 points (-1.66%)
- CAC 40 Index of the French stock market Closed at 8,156.67 points, down 161.31 points (-1.94%)
Investors are also watching the European Central Bank (ECB) meeting, as well as the direction of interest rates from major central banks, following higher energy prices which could increase inflationary pressures.
The UK stock market fell as investors worried that oil prices would surpass $100.
The London stock market closed lower on Wednesday, following a global trend, after crude oil prices surged due to tensions in the Middle East and US bond yields rose.
- FTSE 100 Index UK Stock Market Closed at 10,670.06 points, down 141.60 points (-1.31%)
The investment climate is under pressure from concerns that higher oil prices will increase costs and inflationary pressure, while investors are also assessing economic prospects and the direction of interest rates from central banks around the world.
Oil prices surged above $100 amid concerns that war would impact the supply of hormones.
Global crude oil prices surged more than 3% on Wednesday after tensions between the United States and Iran escalated in the Persian Gulf, raising investor concerns that oil shipments through the Strait of Hormuz could be disrupted.
- Brent crude oil price (November delivery) It closed at $101.21 per barrel, up 3.36%.
- WTI crude oil price (October delivery) It closed at $96.05 per barrel, up 3.25%.
The closing prices of both types of oil were at their highest levels since May, as escalating tensions between the US and Iran, including attacks on oil tankers, fueled market concerns that energy exports from the Middle East could be further disrupted. Analysts warned that if oil prices surged to $120 per barrel, it could begin to have a significant impact on the market.
Gold prices jumped more than 1% as the dollar weakened and investors awaited U.S. inflation data.
Global gold prices surged on Wednesday , boosted by a weaker dollar as investors sought safe-haven gold amid uncertainty surrounding the Middle East and soaring oil prices.
- Spot Gold Price Closed at $4,418.71/ounce, up 1.5%.
- Gold price on Comex market (December delivery) Closed at $4,464.30/ounce, up 0.6%.
The dollar moved near a two-week low, making gold, which trades in dollars, cheaper for holders of other currencies, as investors awaited U.S. PPI and CPI data to assess the direction of the Fed's monetary policy. The market is currently giving a 60% probability that the Fed will raise interest rates at next week's meeting.
The dollar weakened against the yen as investors watched the Fed and the Bank of Japan.
The dollar weakened against the yen on Wednesday, moving near a seven-month low amid oil prices surging above $100 per barrel and shifts in expectations regarding monetary policy from the U.S. Federal Reserve and the Bank of Japan.
- Dollar/Yen It stood at 153.65 yen, down 0.23%.
- Euro/Dollar It stood at $1.1628, up 0.05%.
- dollar index The dollar, which tracks against six major currencies, stood at 98.83 points, stable and near its lowest level in almost two weeks.
The yen continued its strong appreciation, rising by about 4% this month, amid expectations that the Bank of Japan (BOJ) will tighten its monetary policy. Markets widely anticipate a 0.25% interest rate hike at its September 17-18 meeting.
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