Finance

The bond market selloff took a temporary breather at the end of the week, allowing sovereign yields to retreat slightly from historic levels. Earlier in the session, the 10-year Treasury yield surged as high as 5.22%, marking its highest point since 2007, driven by resilient business activity data and expectations of an upcoming October rate hike. Meanwhile, longer-dated 30-year yields hovered near levels not seen since 2004.

Energy and financial markets reacted favorably to reports that U.S. and Iranian negotiators are engaged in talks regarding a phased agreement. The discussions spark hope for the reopening of the crucial Strait of Hormuz maritime corridor within a week, which has been severely disrupted by conflict. The potential diplomatic breakthrough was a central catalyst for pulling West Texas Intermediate crude down to around $92 per barrel.

The University of Michigan's final September survey revealed a drop in consumer confidence to its lowest level in four months, landing at a headline index of 48.1. High baseline prices at the pump continue to negatively impact public perception of the domestic economy. This ongoing weakness has increased long-term inflation expectations, a metric monitored closely by Federal Reserve policymakers.