Asian equity markets showed a slight pullback on Wednesday, even as U.S. stocks reached fresh record highs. The MSCI Asia‑Pacific index (excluding Japan) fell 0.3%, though it remains up 1.5% for the month.
Oil prices rise on supply worries
Crude oil prices jumped as a storm moved toward the Gulf of Mexico and as tensions escalated between Saudi Arabia and the Iran‑backed Houthi rebels in Yemen. U.S. West Texas Intermediate rose 1.05% to $90.38 a barrel, while Brent crude climbed 1.06% to $101.65 a barrel.
Vitol CEO Russell Hardy noted that roughly 12 million barrels per day of crude and 2 million barrels per day of refined products have left the Middle East on tankers over the past week‑plus, underscoring the market’s sensitivity to any disruption in the region.
U.S. equity markets hit new highs
In contrast, U.S. equities continued their upward march. The S&P 500 posted a 0.6% gain, the Nasdaq added 0.45%, and the Dow Jones Industrial Average rose 0.5%, each setting fresh all‑time records.
The rally was supported by a calming of global bond yields overnight, which helped investors stay focused on equity strength.
European bond markets find footing
French government debt saw a pullback after far‑right candidate Marine Le Pen pledged spending cuts and a tighter budget, sending ten‑year French yields down more than 11 basis points. The spread between French OATs and German bunds narrowed to 132 basis points.
Analyst Laura Cooper of Nuveen highlighted that the move is notable given the 2027 French election is still months away, but higher yields have made investors more cautious about fiscal vulnerabilities.
Eurozone bonds, including Italian and Greek issues, performed well amid a broader rally, helping the euro recover slightly above $1.1250.
U.S. Treasury yields and upcoming Fed minutes
U.S. ten‑year Treasury yields settled at 5.3% in Asian trading, while longer‑dated yields edged higher ahead of a 10‑year auction later Wednesday and a 30‑year auction on Thursday. These auctions will test investor demand for U.S. debt after a prolonged sell‑off that pushed longer‑dated yields to a 24‑year high in late August.
Traders have trimmed expectations for a Fed rate hike this month, dropping the probability from about 50% a week earlier to roughly 19%.
Currency and commodity snapshot
The U.S. dollar index inched up 0.03% to 101.94 after a modest 0.27% decline the previous session. The Japanese yen weakened 0.19% to 158.43 per dollar, while the British pound slipped 0.08% to $1.3262.
Spot gold rose to $4,165.53 an ounce, reflecting continued safe‑haven demand amid market uncertainty.
Regional market notes
Australian shares were flat, and Japan’s Nikkei fell 0.86%. Hong Kong’s Hang Seng dropped 0.63%, pulled down by a 4% slide in its biotech sub‑index. Mainland China’s markets remained closed for a holiday.
Overall, the mixed picture of modest equity weakness in Asia, rising oil prices, and stabilising bond markets underscores the delicate balance investors face as geopolitical risks and weather events intersect with global financial trends.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
