Global stock markets saw sharp contrasts on Thursday as bond yield volatility rattled investors. Wall Street indices held modest gains after U.S. Treasury yields surged then eased, with the S&P 500 rising 0.3%, the Dow Jones Industrial Average virtually unchanged, and the Nasdaq composite up 0.3%. In Europe, the moves were far more severe: London’s FTSE 100 fell 1.7%, Paris’s CAC 40 dropped 1.6%, and Frankfurt’s DAX lost 1%, battered by wild swings in government bond yields. France’s 10-year yield, for instance, gyrated from nearly 4.95% down to 4.80% and back to 4.90%.
The turbulence underscores the punishing sensitivity of bond markets, where shifts of hundredths of a percentage point matter. High yields raise borrowing costs and pressure stock valuations, while also pulling investors away from dividend-paying real estate stocks. BXP fell 1.6% and Alexandria Real Estate Equities dropped 2.2%.
Yields climbed on concerns over persistent inflation, elevated oil prices, a resilient U.S. economy, and large government deficits. Brent crude jumped 4.3% to $102.24 a barrel amid uncertainty over the Iran conflict. Jobless claims fell, signaling fewer layoffs, and U.S. manufacturing expanded in September, though input-price pressures accelerated, hinting at further inflation. The 10-year Treasury yield spiked to 5.34%, its highest since 2002, before retreating to 5.23%, which helped Wall Street recover.
Amid the gloom, AI optimism provided a counterweight. Micron Technology’s better-than-expected profit and upbeat AI-driven forecasts lifted its stock 1.7%, adding to a nearly 280% year-to-date gain. Nvidia rose 1.6%, Applied Materials gained 3.8%, and Accenture surged 17% on strong quarterly results. Asian markets benefited from the tech rally, with Japan’s Nikkei 225 jumping 3.3% and South Korea’s Kospi climbing 1.9%.
AP Business Writers Yuri Kageyama and Michelle Chapman contributed to this report. Stan Choe, The Associated Press
