Asian stocks and bonds were projected to decline following a surge in oil prices that triggered a selloff in US markets. This market reaction was further fueled by recent inflation data, which strengthened expectations for an imminent Federal Reserve rate hike.
Brent crude oil prices climbed above $107 a barrel on Thursday, pushing Treasury yields to multi-year highs and elevating the dollar to a one-week peak. The bond market experienced additional pressure after the Treasury bought back $5.19 billion of debt, an amount lower than investors had anticipated. A hotter-than-expected producer price report also prompted traders to increase their bets on a Fed rate hike scheduled for next week.
In the US, major stock indices closed down on Thursday. The S&P 500 fell 0.58%, the Nasdaq fell 0.65%, and the Dow Jones Industrial Average fell 0.60%. This decline was largely attributed to the August producer price data and rising oil prices, both of which intensified concerns that the Federal Reserve would raise interest rates. Rising Treasury yields further detracted from the attractiveness of stocks. Heavyweight chipmakers like Nvidia and Micron Technology saw losses, while Apple, after releasing a new $1,999 folding iPhone, bucked the trend with a rally.
