Finance

West Texas Intermediate and Brent crude prices slid over 2% at the end of the week, with Brent dropping below the key threshold of $98 per barrel. Market optimism grew following reports that Iran reached out to the United States to negotiate a return to a prior memorandum of understanding, offering a potential path to reopen the Strait of Hormuz. Additional support came from discussions during the Trump-Xi summit aimed at winding down regional conflicts.

The bond market saw a temporary pause in its aggressive selloff, allowing the 10-year Treasury yield to settle near 5.18% after briefly hitting 19-year highs earlier in the week. Yields initially jumped in response to inflationary warning signs from consumer sentiment reports and hawkish monetary shifts. The late-week decline in crude oil prices ultimately provided a reprieve, helping fixed-income yields edge down from their peaks.

The University of Michigan's final September sentiment index revealed that U.S. consumers expect inflation to rise to 4.6% over the coming year, up from 4.0% in the prior month's forecast. While overall consumer sentiment outpaced expectations, it still fell to its lowest point in four months due to elevated gas prices and tariff anxieties. Meanwhile, secondary data showed robust domestic activity, including a 6.4% jump in new home sales for August.