Finance

International and domestic crude oil prices surged significantly following an escalation of military tensions in the Middle East involving the U.S. and Iran. Brent crude futures jumped past the $107 per barrel threshold, while West Texas Intermediate settled above $102, reigniting global macroeconomic concerns over energy supply constraints.

The yield on the 10-year U.S. Treasury note surged to roughly 4.94%, marking its highest level since late 2023. This bond market selloff persisted even as the Treasury Department conducted a debt buyback operation in an attempt to calm the market, which was ultimately overshadowed by a hot producer price index report.

The latest U.S. Producer Price Index report revealed that wholesale inflation increased by 0.4% in August, picking up from the 0.1% rate seen in the prior month. This rise was heavily driven by a spike in energy costs, increasing the perceived likelihood that central bankers will enact an interest rate hike in their upcoming policy meeting.