US equity indices experienced declines today, with the Nasdaq 100 down 1.3%, and both the S&P 500 and Dow Jones falling by approximately 0.8%. This downturn is primarily attributed to the ongoing US-Iran standoff, which has driven crude oil prices higher and intensified inflation concerns. As a result, market expectations for Federal Reserve rate hikes have increased, pushing Treasury yields to multi-year highs.
Oil prices surged, with Brent crude rising nearly 3% to trade near $100 per barrel, and West Texas Intermediate (WTI) hovering around $95.5. European TTF natural gas prices also climbed by 4.5% to just over €73 per MWh. The US 10-year Treasury yield advanced by about 7 basis points, reaching 5.28%, its highest level since 2007. This rise in real yields, up almost 100 basis points since the start of the year with half of that increase in September alone, negatively impacts non-yielding assets. Gold, for instance, fell approximately 4% to $4,120 per troy ounce, and silver dropped 5% to around $61 per ounce. Cryptocurrencies were also under pressure, with Bitcoin weakening by nearly 2% to around $83,000.
Despite the broader market decline, Nvidia Corp. saw its shares rise over 2% to around $230 following the announcement of a record $150 billion increase to its share buyback program. The company also introduced an open-source security system for AI agent monitoring, aiming to prevent security breaches. Analysts note that the focus will remain on the bond market and economic data, as earnings season is still weeks away, and the Fed is prioritizing its inflation mandate.
