Oil Hits $103.61, 10-Year Yield Reaches 19-Year High
U.S. crude oil prices rose to $103.61 per barrel Tuesday. The 10-year Treasury yield climbed to 5.01%. Market futures indicated a 0.2% decline in the S&P 500.
Benchmark U.S. crude oil prices increased by $1.03 to reach $103.61 per barrel early Tuesday. This price point reflects a more than 50% surge since late February. The 10-year U.S. Treasury yield traded at 5.01%. This level marks the highest point in 19 years. S&P 500 futures fell by 0.2% during early trading.
The average price of a gallon of regular gasoline in the United States is now $4.33. This figure was $4.08 a month ago and $3.18 a year ago. Rising energy costs are driving inflation expectations higher. The Federal Reserve is expected to raise interest rates for the first time in three years this week. This action contradicts recent forecasts of rate cuts.
Supply Chain Disruptions Raise Costs
A major Saudi Arabian oil pipeline is out of service for several weeks. Regional officials confirmed the damage following an attack last week. This pipeline allowed exports to bypass the Strait of Hormuz. Iranian attacks have previously restricted tanker movement in that area. Brent crude prices also rose by 0.3% to $106.94 per barrel.
Fed Policy Shifts Amid Inflation
The Federal Reserve had projected a rate cut in March. Current market data suggests a hike is likely. Inflation is expected to remain above the central bank’s 2% target. This shift puts the Fed at odds with political pressure for lower rates. Longer-term Treasury yields are also at their highest levels in two decades.
Global Indices Reflect Market Volatility
European markets closed with minor losses. France’s CAC 40 dropped by 0.2%. Germany’s DAX fell by 0.1%. The UK’s FTSE 100 declined by nearly 0.4%. In Asia, Japan’s Nikkei 225 finished down less than 0.1%. Australia’s S&P/ASX 200 lost 0.9%. South Korea’s Kospi index fell by 0.9%. These moves align with broader global risk aversion.
AI stocks faced pressure from safety concerns. Anthropic’s CEO called for a global slowdown in development. This comment added to worries about overvaluation in the sector. Softbank Group shares jumped 7.5% in Tokyo. This gain recouped overnight losses. The move followed comments delaying a potential stock sale by OpenAI.
