Oil prices jump 5%, pushing Treasury yields higher and stocks lower as Iranian attacks disrupt tanker traffic
Oil prices jumped as much as 5% Thursday morning, sending stocks nosediving and pushing Treasury yields higher as fresh Iranian attacks in the Strait of Hormuz disrupted tanker traffic.By approximately 9:40 a.m.ET, Brent crude oil futures rose 4.3% to $104.54 a barrel – on track for its highest closing price in weeks – and West Texas Intermediate crude increased 4.3% to $92.09 after data revealed daily traffic had trickled to a mere fraction of pre-war levels.Reports that President Trump could soon order US forces to resume a large-scale operation in Iran multiplied traders’ fears, sending the US 10-year Treasury yield higher to 5.294% – reversing the previous day’s declines.The 10-year yield has risen for 10 of the past 12 trading days, hovering near a 24-year high.
A global bond sell-off has pushed yields around the world higher, as investors fear persistent inflation and more interest-rate hikes.The Dow Jones Industrial Average also fell 95 points, or 0.2%, while the S&P 500 and Nasdaq tumbled 0.4% and 0.6%, respectively.National average gasoline prices have remained stubbornly above $4 a gallon amid the war with Iran.Diesel, which is used for home heating oil and transportation, meaning it can impact food and apparel prices, has soared higher than $6 a gallon.The US had partially restored traffic through the Persian Gulf, with sailors reportedly being offered as much as $25,000 a trip to make the dangerous voyage – but Tehran responded by ramping up its attacks on commercial vessels.Producers off the US Gulf Coast were also forced to slash production due to an intensifying hurricane, further restricting supply – and threatening to keep prices elevated.The Atlantic reported Wednesday that Trump is weighing whether to resume strikes on Iran ahead of the midterms, which are less than a month away.
He had previously said the US would likely resume strikes immediately after the consequential elections.If Trump does move forward, the escalation wou...