Oil at $103.61 and 10-Year Yield at 5.01% Pressure Global Markets
Benchmark U.S. crude rose to $103.61 per barrel as the 10-year Treasury yield climbed to 5.01%. Investors now price in a Federal Reserve rate hike this week to combat inflation.
Benchmark U.S. crude rose $1.03 to $103.61 a barrel early Tuesday. Brent crude gained 0.3% to $106.94 a barrel. Both prices are up more than 50% since the Iran conflict began in late February.
The 10-year Treasury yield traded at 5.01%. This level is the highest in 19 years. It rose from 3.97% before the war with Iran started. Wall Street futures slid ahead of the opening bell.
Supply disruptions drive crude higher
A key Saudi oil pipeline is out of service for weeks. This follows an attack last week. The pipeline allowed exports to bypass the Strait of Hormuz. Iranian attacks have stifled tankers in that route.
The average cost of regular gasoline is $4.33 per gallon. A month ago, it was $4.08. A year ago, it was $3.18. These figures come from AAA data.
Rate hike expectations build
Markets expect the Federal Reserve to hike its main rate this week. This would be the first increase in three years. In March, the Fed forecast one rate cut for the year. Current inflation pressures have shifted that outlook.
GN auto markets/bonds: treasury yields data reflects this shift. Long-term yields are near two-decade highs. This contradicts the push for lower rates by President Donald Trump. Inflation remains well above the 2% target.
AI stocks face safety concerns
Artificial intelligence stocks slid overnight on safety fears. Anthropic CEO Dario Amodei called for a global slowdown in AI development. OpenAI CEO Sam Altman said a stock sale likely waits until next year.
Softbank Group jumped 7.5% in Tokyo trading. This recouped overnight losses. The Nikkei 225 finished down less than 0.1% at 63,484.10. European indices also dipped slightly during midday trading.
