Oil surge lifts yields as rate hike expectations strengthen

US equities fell on Thursday as a surge in oil prices lifted Treasury yields, increased borrowing costs and added to concerns over corporate margins. The S&P 500 declined 0.60%, the Dow fell 0.40% and the Nasdaq 100 lost 1.30%. Producer prices rose 0.40% month-on-month in August, driven in part by higher energy prices, while markets increased expectations of a Federal Reserve rate hike next week. The dollar index rose to 99, with markets pricing a 70% chance of a 25 basis point (bps) increase, up from 60% previously. Core PPI rose 0.20%, below both the previous month’s 0.30% increase and forecasts of 0.30%, keeping today’s (Friday, 11 September 2026) CPI report firmly in focus.

Credit-sensitive technology stocks came under pressure as longer-dated borrowing costs rose, with Marvell, Intel, and Lam Research each falling around 3%. Nvidia declined 1% and Oracle fell 1.50% ahead of its earnings. In contrast, Apple edged higher after announcing a series of new products.

European equities also weakened as investors assessed the European Central Bank’s (ECB) decision to raise borrowing costs by 25 bps. The main refinancing rate increased to 2.65% and the deposit rate to 2.50%, while the ECB raised its 2027 and 2028 inflation forecasts. The STOXX 50 and STOXX 600 each fell 0.30%, while the DAX declined 0.84%, the CAC 40 lost 0.42% and the FTSE 100 fell 0.55%. Rising oil and natural gas prices, alongside elevated inflation expectations, added to pressure on markets.

Asian equities were mixed, with the Shanghai Composite falling 0.43% and the Shenzhen Component declining 0.77%, while the Hang Seng lost 1.30%. Japan’s Nikkei 225 and Topix each gained 0.20% as the recent rise in oil prices and bond yields lost some momentum. Investors continued to monitor expectations of further Bank of Japan tightening and the stronger yen.

South African equities fell sharply, with the FTSE/JSE All Share Index declining 1.31% to 114 993.07. Resources fell 2.34% and Metals and Mining declined 2.21%, while Financials lost 1.14%. At 21h04, the rand weakened 1.27% against the dollar to R16.21, trading around its weakest level since late August. It also weakened 1.03% against the pound to R21.91 and 1.12% against the euro to R18.83.

Brent crude rose 6.74% to $108.03 per barrel. The increase followed renewed US-Iran hostilities, attacks on Saudi energy infrastructure and concerns over disruptions to energy flows through the Strait of Hormuz. Gold fell 1.90% to $4 316.65 per ounce, while silver declined 5.46% and platinum fell 6.98%.