US stocks turn higher as oil and Treasury yields stay elevated

what happened

According to Seeking Alpha, US indexes reversed higher on Tuesday after an early decline. The S&P 500 was up 0.5%, the Nasdaq Composite gained 0.3%, and the Dow Jones rose 0.9%. The morning slide followed a drop in South Korea, where the benchmark fell 4.4%, and cloud infrastructure and AI company Elice lost more than 30% after its stock market debut.

In bonds, yields eased slightly. The 10-year Treasury yield fell 3 basis points to 5.11%, the 2-year fell 1 basis point to 4.77%, and the 30-year fell 4 basis points to 5.43%. WTI futures rose to $98.32 and Brent to $109.14 a barrel. Peter Schiff of Euro Pacific Asset Management said: "Oil is $110, up another 6% this morning. We are still early in a major breakout in the price of oil that will substantially raise the cost of living. This is a tax hike to cover deficit spending."

On the economic calendar, housing starts rose unexpectedly in September by 5.9% month over month, while building permits held up. Pending home sales came in at 7.3% for September, far weaker than expected.

why it matters

The key signal for markets is the combination of expensive oil and high government bond yields. Higher energy prices can feed inflation expectations and pressure bonds as well as richly valued stocks. The South Korean sell-off is a reminder that investors are sensitive to debt loads and demand for AI companies.

market impact

US stocks and oil: high Brent prices and bond yields weigh on appetite for risk

tags

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