The US stock market continues to be heavily affected by rising bond yields, which have hit their highest level in nearly 20 years. The 30-year bond yield rose to 5.35%, the highest mark since June 2007. The US PPI also rose to 5.4% in the latest report, higher than estimates.
The resurgence of the US-Iran war and steady inflation have left the stock market in shambles this year. Oil prices are the most impacted, with the price per barrel returning to $100 in the past week. Attacks in the Middle East have resumed, and the Strait of Hormuz hasn’t seen steady movement of oil ships since February.
On Thursday, the Dow Jones Industrial Average (^DJI) fell 0.3%, while the S&P 500 (^GSPC) fell 0.5%. The tech-heavy Nasdaq Composite (^IXIC) dropped 0.8%, with all three indexes deepening losses from the past three days. Furthermore, President Trump said Wednesday that oil prices may not come down until after the midterm elections two months away, meaning more dips could be ahead. The ongoing US-Iran war and disruptions in the Strait of Hormuz have raised concerns that an energy shock could flow into broader inflation and all but force the Federal Reserve to raise interest rates.