Gaza Herald – Oil prices surged more than 6 percent during Thursday trading, with Brent crude surpassing the $107 per barrel mark. This spike occurred amidst disruptions in supply routes through the Strait of Hormuz and the Red Sea. The energy price increase heightened inflation fears and drove US stocks down at the close of trading.
The rise in oil prices coincided with a climb in US Treasury bond yields. Investors are currently awaiting consumer price index data for August. There are growing concerns that persistent price pressures could lead to tighter monetary policy by the Federal Reserve.
Surging energy costs, combined with producer price data, have sparked worries about the trajectory of interest rates. According to the CME Group’s FedWatch tool, traders now expect the Federal Reserve to raise rates by at least 25 basis points next week. This probability has risen to approximately 70 percent, up from 64 percent before the producer price data was released.
In the bond market, the yield on ten-year US Treasuries reached its highest level in nearly three years. The thirty-year bond yield hit a peak not seen in over nineteen years. Meanwhile, the two-year note yield climbed to its highest point in more than two years.
Ross Mayfield, an investment strategy analyst at Bird in Louisville, Kentucky, stated that short-term yield increases reflect expectations that the Fed may raise rates in the coming months. He noted that long-term yields are influenced by debt concerns, deficits, and sustained high inflation.
Mayfield added that rising bond yields exert negative pressure on stocks. Higher yields lower corporate valuations and increase financing costs for businesses. For consumers, these conditions also raise the cost of borrowing and spending.
On Wall Street, the S&P 500 fell by 44.16 points, or 0.58 percent, to close at 7592.20 points. The Nasdaq Composite dropped 167.15 points, or 0.64 percent, ending at 26086.19 points. The Dow Jones Industrial Average declined 313.64 points, or 0.60 percent, to finish at 52067.02 points, according to preliminary data.
Shares of major chip companies faced headwinds. Both the S&P 500 and Nasdaq indices were pressured by Nvidia and Micron Technology stocks. Conversely, Apple shares rose sharply following the launch of its new iPhone, which starts at a price of $1999.
Data released on Thursday showed that the US Producer Price Index rose in line with expectations for August on a monthly basis. This increase was driven by a recovery in energy product costs. Markets are now waiting for consumer price data scheduled for release on Friday.
Despite the recent decline, the S&P 500 remains up approximately 11 percent since the beginning of 2026. However, it has fallen about 3 percent from its all-time high closing level recorded on August 13.
This report was produced in the Gaza Herald newsroom.
