Markets brace for a hotter inflation shock
Oil is surging, bonds are selling off and investors are getting nervous ahead of Wednesday’s Fed decision.
Oil takes centre stage
• Brent rises 1.3% to around $107
• Oil is up more than 18% this month
• Middle East supply risks are keeping traders on edge
US 10-year yield crosses 5%
• Treasury yields hit 5%, the highest since 2023
• Higher oil prices are adding to inflation fears
• Markets now price more than 90% odds of a Fed rate hike
• Rising yields could put pressure on expensive stock valuations
Corporate watch
• Bank of America expects Q3 trading revenue to be relatively flat
• Kioxia is considering a $10 billion-plus US listing
• SpaceX is set for a bigger Nasdaq 100 weighting, potentially triggering billions in passive fund buying
AI uncertainty returns
Global chip stocks slipped as AI leaders called for a slower pace of development. Investors are now weighing whether AI regulation and caution could affect the tech rally.
Asia stays cautious
Australian stocks fell 0.9%, Hong Kong slipped 0.2%, while Japan was little changed. Bitcoin dropped 1.6%.
The big market question
Can stocks handle oil above $100 and bond yields around 5% at the same time?