Wall Street's record run just met a $100 barrel of oil
Reports of possible U.S. strikes on Iran sent crude surging and bond yields to multi-decade highs, knocking stocks off their record perch.
A global stock rally that had brought equities within touching distance of an all-time high lost further ground on Thursday as oil surged on renewed Middle East tensions, stoking fresh concerns about inflation and pushing bond yields toward levels not seen in decades.
Records give way
The MSCI All Country World Index — a key barometer of global stocks — fell 0.2%, pulling further away from its record high after coming within 1.5% of the peak earlier this week, according to Bloomberg. Wall Street benchmarks slipped Wednesday, a day after closing at records, and Asian shares followed them lower with a 1% decline.
Futures pointed to more pain at Thursday's open: Dow futures were down 1%, while S&P 500 and Nasdaq futures were off 0.6% and 0.8% respectively, with the S&P and Nasdaq pulling back from record closes set on Tuesday, according to Investopedia. The 10-year Treasury yield sat around 5.31%–5.35%, near its highest since 2002, after the Federal Reserve raised interest rates last month — a move backed unanimously by officials, Bloomberg reported.
Why oil spiked
The spark was geopolitical. The Atlantic and NBC News reported Wednesday that the White House had asked the Pentagon to draw up plans for strikes against Iran that could be carried out before the midterm elections, according to Investopedia. Brent crude rose more than 2% to climb above $102 a barrel, while WTI crude futures jumped about 5% to $92.71, Bloomberg and Investopedia reported.
It was not the only supply disruption. A storm shut some U.S. output, and Iran-backed Houthis struck two airports in Saudi Arabia, killing three people, according to Bloomberg. Gold futures traded around $4,136 an ounce, while bitcoin hovered near $82,500 — well below the $87,000 highs seen earlier this week.
Earnings take the spotlight
Beyond macro fears, markets were digesting a busy earnings tape. Samsung's preliminary third-quarter results — record operating profit but still short of analyst estimates — sent memory stocks including Micron, Sandisk, and SK Hynix lower premarket, Investopedia reported. PepsiCo topped estimates with $25.27 billion in quarterly sales but trimmed its full-year profit forecast, while data-center operator Applied Digital surged after revenue came in at $341.9 million, more than triple what analysts expected — a possible bullish signal for the AI trade.
As one TradeStation strategist told Bloomberg, with inflation above target and activity strong, price stability remains the Fed's dominant mandate — meaning the rate environment that stocks just climbed through may not ease anytime soon.
Written by the BidAsk Newsroom. Based on reporting from the sources below.
