[New York Stock Exchange] WTI Surges Above $100, 30-Year Treasury Yield Reaches 19-Year High... Indexes Close Lower

International Oil Prices Jump Over 6%
30-Year U.S. Treasury Yields Surge to 5.37%, Highest in 19 Years
August PPI Up 5.4% Year-on-Year
Semiconductor Stocks Like Nvidia and Micron Weaken

On September 10 (local time), the three major indices of the New York Stock Exchange all closed lower. Investor appetite for risk assets waned as international oil prices surged over 6% and the yield on the U.S. 30-year long-term Treasury note soared to its highest level in approximately 19 years, fueling heightened concerns about inflation and the possibility of further tightening by the Federal Reserve (Fed).

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average (Dow) fell by 316.56 points, or 0.60%, to close at 52,064.10. The S&P 500 Index, which is focused on large-cap stocks, declined by 44.66 points (0.58%) to end at 7,591.70, while the tech-heavy Nasdaq Composite lost 171.61 points (0.65%) to finish at 26,081.72.

View of the New York Stock Exchange. New York (USA) – Photo by Yoonju Hwang

The market witnessed expanded selling pressure as concerns over inflation intensified amid the steep jump in international oil prices. Semiconductor stocks, which had previously led the bull market, dragged down the indices as they weakened in response to the possibility of additional rate hikes.

On the New York Mercantile Exchange, the October delivery West Texas Intermediate (WTI) contract closed at $102.48 per barrel, up 6.69% from the previous session. This is the first time WTI breached the $100 mark per barrel since May 21. On the ICE Futures Exchange, Brent crude for November delivery settled at $107.63 per barrel, a rise of 6.34% from the previous close. Both crude benchmarks ended at their highest closing prices since May 19.

International oil prices surged due to heightened geopolitical tensions in the Strait of Hormuz, which sparked fears over potential disruptions in energy supply. After the U.S. and Iran attacked each other's oil tankers in recent incidents, anxiety about the stability of oil shipping routes escalated even further when the Iran-backed Houthi rebels in Yemen seized the strategic port city of Mocha along the Red Sea.

Concerns about a protracted war have also intensified, especially after The Wall Street Journal (WSJ) reported that senior White House aides privately discussed with the President the possibility that conflict with Iran could continue for the remainder of President Trump's term.

The U.S. Producer Price Index (PPI) for August, released on the same day, further stoked inflation fears. According to the Department of Labor, the August PPI rose 0.4% from the previous month, marking the largest month-to-month increase since May. On an annual basis, the PPI increased by 5.4%, exceeding the market forecast of 5.3%. This was largely driven by a 4.2% monthly increase in energy prices.

The core PPI—excluding volatile food and energy prices—rose by 0.2% month-over-month and 4.6% year-over-year. Although core indicators remained relatively moderate, concerns were raised that sustained increases in oil prices could translate into higher consumer prices through increased corporate costs.

Steven Koltman, Head of Macroeconomics at 21Shares, noted, "It is difficult to draw a clear conclusion about whether the Fed will raise rates next week based on the PPI alone," but he added, "With WTI breaching $100 per barrel again and Treasury yields hitting record levels, the market is even more cautious ahead of the Consumer Price Index (CPI) release on September 11."

U.S. Treasury yields also rose across the board, driven by the sharp rise in oil prices and inflation data that exceeded expectations. Although the U.S. Treasury expanded its buyback program for long-term bonds, it was insufficient to rein in climbing yields. The Treasury increased the maximum buyback amount for Treasuries with 10–20 years maturity from $2 billion to $6 billion, but the actual amount purchased stood at about $5.2 billion. Many in the market assessed that even the expanded buyback program is not enough to ease the supply-demand burden on long-term bonds.

The benchmark U.S. 10-year Treasury yield nearly hit 4.95% during the session, its highest level since November 2023. The 30-year yield surged to 5.37%, the highest in roughly 19 years since 2007.

According to CME Group’s FedWatch Tool, the federal funds futures market placed a 73% probability on the Fed raising its benchmark rate by 0.25 percentage points at the September Federal Open Market Committee (FOMC) meeting. This is an increase from about 64% before the PPI data was released.

By sector, major semiconductor stocks finished lower. Notable declines included Nvidia down 2.37%, Micron Technology down 4.90%, Intel down 5.57%, SK hynix ADR down 5.20%, and TSMC down 1.68%.

This content was produced with the assistance of AI translation services.