Investment Daily: US stocks fell alongside higher Treasury yields

10 September 2026

US stocks declined on Wednesday alongside higher Treasury yields. The S&P 500 closed 0.5% lower.

US Treasuries fell as higher oil prices lifted inflation concerns and the Treasury’s USD6bn buyback announcement fell short of more aggressive market expectations. 10-year yields rose 5bp to 4.84%.

European stocks dropped on Wednesday on higher oil prices as geopolitical tensions continued. The Euro Stoxx 50 fell 1.6%. The German DAX lost 1.7% and the French CAC was down 1.9%. In the UK, the FTSE 100 ended 1.3% lower.

European government bonds fell. 10-year German bund yields rose 7bp to 3.44% and 10-year French bond yields jumped 11bp to 4.34%. In the UK, 10-year gilt yields climbed 9bp to 5.26%.

Asian stock markets lacked clear direction on Wednesday. Korea’s Kospi rose 1.4% led by gains in semiconductor stocks, while Japan’s Nikkei 225 slipped 0.2% amid a further strengthening of the yen. Elsewhere, Hong Kong’s Hang Seng fell 0.2% and China’s Shanghai Composite gained 0.3%. India’s Sensex closed 1.1% lower.

Crude oil prices extended gains on Wednesday. WTI for October delivery settled 3.2% higher at USD96.1 a barrel.

The Bank of Japan (BoJ) raised its policy rate by 25bp to 1.00%, as widely expected, and decided to halt the reduction in JGB purchases from April 2027. The BoJ highlighted the risk of underlying CPI inflation deviating upward above 2%.

The Reserve Bank of Australia (RBA) kept its policy rate unchanged at 4.35%, as widely anticipated. Governor Bullock noted upside risks to inflation and did not rule out further tightening.

In China, May activity indicators continued to reflect a two-speed economy. Industrial production showed resilience, up 4.5% YOY, driven mainly by gains in high-tech manufacturing and new energy sectors thanks to robust exports. However, non-tech domestic demand was softer than expected as the property sector remained under pressure. Retail sales fell 0.6% YOY, partly reflecting an unfavourable base effect from last year’s trade-in subsidies. Fixed asset investment contracted by 4.1% YOY in the first five months, despite strong advanced manufacturing investment.

In the US, PPI likely rose 0.4% mom in August, driven by higher energy prices. Core goods PPI has stabilised recently while trade services remain volatile.

The European Central Bank (ECB) is likely to raise the policy rate by 25bp following recent hawkish official comments. ECB President Lagarde may hint at further tightening.