On Wednesday, stocks edged higher as markets attempted to recover from a recent downturn driven by renewed geopolitical tensions between the U.S. and Iran, alongside rising bond yields.
The benchmark U.S. 10-year Treasury yield climbed to a high of 4.814% during the session, marking its highest level since November 2023, according to CNBC.
Government bond yields rose across Europe, with the U.K., Germany, and France seeing increases. In Japan, the 10-year government bond yield hovered near a multi-decade high.
On Tuesday, equities closed sharply lower, with the Dow Jones Industrial Average shedding over 400 points. The decline was fueled by concerns over the escalating U.S.-Iran conflict, rising oil prices, and surging bond yields.
“Renewed hostilities in the Middle East sent crude oil prices soaring, driving Wall Street lower and pushing global bond yields to multi-year—and in some cases, multi-decade—highs,” said Kyle Rodda, senior financial market analyst at Capital.com.
“Markets are likely hoping that the latest flare-up in tensions between the U.S. and Iran represents another attempt by the Trump administration to ‘escalate to de-escalate’.”
“Looking ahead, the Asian region, which is sensitive to U.S. interest rates and global oil prices, remains vulnerable to further pullback, with futures indicating a potentially bearish session,” Rodda added.
Broadcom (AVGO), Snowflake (SNOW), and Hewlett Packard Enterprise (HPE) are among the major companies scheduled to report earnings today.
According to ADP, private sector employment grew by 38,000 jobs in August, down from 46,000 the previous month and below the estimated 47,000, marking the slowest pace of growth since January.