Bond Yields Climb Across the Globe
Treasury yields rose sharply across the curve on Tuesday, reflecting growing investor unease over persistent inflationary pressures. The 2-year yield hit a new 52-week intraday high of 4.400% before closing at 4.398%, up 4.8 basis points. The 10-year yield climbed to 4.792%, and the long-dated 30-year yield reached 5.266%.
The selling pressure in bonds was not limited to the United States. Japan’s 10-year government bond yield broke above 3% for the first time since 1996, while Britain’s 30-year gilt yield struck its highest level since 1998. These synchronized global moves underscore a widespread repricing of inflation risk.
Fed Rate Hike Probability Swings Back Higher
Expectations for monetary policy tightening have shifted dramatically in recent weeks. Roughly a month ago, markets assigned a 67% probability to a rate increase at the September FOMC meeting. That figure dropped to under 40% a week later, but has now rebounded to nearly 68% as fresh inflation data and geopolitical tensions fuel upward pressure on prices.
Equity Markets End the Session in the Red
The major averages posted broad-based losses. The Dow Jones Industrial Average declined 0.8% to close at 52,766, the S&P 500 fell 0.7% to 7,631, and the Nasdaq Composite dropped 1.03% to 26,099. The start of what has historically been the weakest month for equities appears to be following seasonal patterns.
Energy Stocks Lead Gains as Oil Prices Jump
Crude oil prices extended their rally, with West Texas Intermediate futures climbing 5.7% to $90.64 per barrel after reports of attacks on tankers transiting the Strait of Hormuz and fresh military strikes in the region. Energy names benefited accordingly, with Chevron rising 2.4% following its agreement to develop Venezuelan oil reserves.
Defensive Sectors Attract Safe-Haven Flows
Investors rotated into traditional defensive plays. Consumer staples, healthcare, and utility stocks all posted gains. Procter & Gamble added 0.8%, while UnitedHealth Group climbed 1.8%, reflecting the flight to perceived safety amid uncertainty.
Apple Debuts New CEO Amid Strong Rally
Apple shares jumped 2.6% during its first trading session under new CEO John Ternus. The company’s market capitalization stood at $4.75 trillion at the close. If Ternus replicates the market-cap growth achieved under his predecessor, Apple’s valuation could expand dramatically over the coming decade and a half.
Cybersecurity and Pharmaceutical Stocks Make Moves
Palo Alto Networks slid 5.2% ahead of its earnings release, despite having gained over 100% since early May. Wall Street expects the company to report earnings of 98 cents per share on revenue of $3.35 billion, a more than 33% year-over-year increase. One analyst raised his price target from $330 to $415, calling any pullback a buying opportunity.
Novartis ADRs surged 6.0% after the Swiss pharmaceutical giant announced successful Phase III trial results for a multiple sclerosis treatment. The drug, remibrutinib, demonstrated superiority versus an existing therapy. Analyst sentiment remains mixed, with a consensus Hold rating.
