Markets mixed as yields ease despite higher oil

US stocks recovered from earlier losses on Thursday as the sell-off in Treasuries paused. The S&P 500 gained 0.20% and the Nasdaq rose 0.30%, while the Dow Jones closed broadly unchanged. The 10-year Treasury yield eased from its highest level since 2002 as crowded positions were unwound. Treasuries also gained after Federal Reserve Vice Chair Philip Jefferson said more time may be needed to assess whether further rate increases are necessary. Chipmakers were among the beneficiaries, with Nvidia gaining 1.10%, Advanced Micro Devices rising 0.60% and Micron adding 3% after issuing an upbeat current-quarter forecast following strong fiscal fourth quarter results.

The S&P Global US Manufacturing Purchasing Managers' Index fell to 55.9 points in September 2026 from a preliminary 57, but remained above August’s 53.9 and was the strongest reading since May 2022. Output and new orders accelerated, while employment growth reached its strongest level in more than five years. However, export sales continued to decline and inflationary pressures intensified.

Oil prices climbed above $93 a barrel as the US deployed additional military forces to the Middle East, adding to concerns around regional supply risks. The increase came despite crude flows from the region having largely recovered to prewar levels, with the recovery remaining fragile amid attacks on tankers transiting the Strait of Hormuz and strikes on regional refineries. Ukrainian strikes on Russian refineries also prompted Moscow to ban diesel exports, while Chinese refiners cancelled some gasoline and jet fuel exports planned for October. Higher oil prices had previously contributed to rising Treasury yields by reinforcing inflation concerns and expectations of further interest-rate increases by central banks.

European equities followed the broader risk-off tone, with the STOXX 50 and STOXX 600 each falling more than 1%. Banks led the declines, while automobiles, basic resources and other cyclical sectors also weakened. The CAC 40 fell 1.60% to 7 835, its lowest level since late March, amid concerns over France’s public finances. France’s 10-year OAT yield rose above 4.90%, while BNP Paribas fell 3.60% and LVMH Moet Hennessy Louis Vuitton SE declined 2.70%. Frankfurt’s DAX 40 lost about 1% to 24 939, with pharma and healthcare, banks and autos among the weakest sectors. The FTSE 100 fell more than 1.50% to 10 432, while the UK 30-year gilt yield briefly moved above 6% for the first time since 1998. Energy stocks were among the few gainers, supported by higher oil prices.

In Asia, Japan’s Nikkei 225 jumped 3.30% to 68 957 as technology and artificial intelligence-related shares rallied following Micron’s strong outlook. Kioxia, Advantest and Lasertec were among the notable gainers. China’s Shanghai Stock Exchange was closed for National Day and will remain closed through 7 October, with trading resuming on Thursday, 8 October. Hong Kong markets were also closed on 1 October for National Day, with normal trading resuming today (Friday, 2 October).

South African markets ended lower, with the JSE All Share Index falling 0.69% to 107 763.09. Financials declined 2.02%, while the Resources 10 gained 0.21% and Metals and Mining rose 0.41%. In currency markets, the rand weakened by 1.62% against the US dollar, 1.02% against the British pound, and 0.64% against the euro at 18h58 SAST, trading at R16.69, R22.01 and R18.72, respectively.

At 20h14 SAST Brent crude rose 4.38% to $102.32 a barrel, while gold increased 0.12% to $4 160.78 an ounce. Silver and platinum were little changed, rising 0.10% and 0.01%, respectively.