Global markets under pressure as yields and oil rise

US equities started 4Q26 lower on Thursday as rising Treasury yields and higher oil prices weighed on sentiment. The S&P 500 fell 0.30%, the Nasdaq declined 0.20% and the Dow Jones shed 245 points. Materials and real estate were among the weakest sectors, while energy outperformed. The US 10-year Treasury yield briefly rose above 5.30%, its highest level since early 2002, before easing to 5.27%. Expectations of further Federal Reserve tightening remained a focus, although the probability of an October rate increase fell to 34% from 70% last week.

The S&P Global US Manufacturing PMI 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.

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.

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.