Global equities slip as bond yields and oil prices climb

US indices came under pressure on Tuesday as rising global bond yields and higher oil prices renewed concerns about inflation and borrowing costs. The S&P 500 fell 0.70%, the Nasdaq Composite declined 1.70%, and the Dow Jones shed 116 points. Semiconductor stocks led the sell-off. Nvidia fell 2.30%, while Broadcom declined 3.20%, Micron lost 7% and AMD retreated 4.30%. Intel tumbled 6.60%, while Sandisk fell 9%. Other major artificial intelligence (AI)-related companies also ended lower, with Meta declining 4.40%, Tesla easing 0.70%, and Oracle falling 2.70%.

According to news reports, the rise in longer-term bond yields is also making investors more cautious about the valuations of growth and technology companies, as higher discount rates reduce the attractiveness of future earnings. This was particularly evident in the semiconductor sector, which has benefitted strongly from AI but is now facing greater scrutiny over elevated valuations and the cost of financing continued investment. The US 30-year Treasury yield reached its highest level since 2007, while yields also climbed sharply in other major markets. At the same time, US crude rose a further 0.50% to around $84.94 a barrel as hopes of progress in US-Iran negotiations faded. Together, higher energy costs and rising yields are creating a more challenging backdrop for equities, despite continued strength in corporate earnings and AI-related investment.

European equities extended recent declines, with the pan-European STOXX Europe 600 falling 0.69% to 651.9 points, marking its sixth consecutive session in the red and its longest losing streak since November 2025. Investor sentiment remained under pressure as Middle East tensions escalated, amid a renewed rise in oil prices. Germany’s DAX fell 0.80% to 26 128.36, while France’s CAC 40 declined 0.82% to 8 509.36. London’s FTSE 100 was the exception, edging 0.07% higher to 10 728.04.

The broader pullback was also reflected in rising government bond yields, as investors weighed growing debt issuance and concerns over stretched fiscal positions in both the US and eurozone. This added to uncertainty around the path for interest rates, while technology and industrial stocks bore much of the pressure. ASML fell around 5%, Infineon dropped more than 7% and Schneider Electric, Siemens and Siemens Energy also recorded sizeable declines as the sell-off in AI-related infrastructure stocks spread across European markets. With geopolitical risks once again on the rise, investors are seemingly more cautious, leaving European equities vulnerable to further volatility.

Asian markets closed mixed on Tuesday as higher oil prices and rising global bond yields revived concerns. Chinese equities proved more resilient, with the Shanghai Composite and Hang Seng gaining 0.17% and 0.14%, respectively, helped by support in selected technology and consumer-related stocks and relatively firm corporate earnings. Japan, however, saw a sharper sell-off, with the Nikkei 225 falling 2.50% as rising domestic and global bond yields put pressure on technology and semiconductor shares.

South African equities ended lower on Tuesday, with the FTSE/JSE All Share Index falling 1.18% to 113 323.45 points, while the Top 40 declined 1.24% to 105 634.97 points. Resource shares were among the biggest drags, with the Resources 10 Index down 2.13% and the Metals and Mining Index falling 2.39%. Industrials also weakened by 0.77%, while financial shares declined 0.86%, adding to the broader market pressure. The pullback came against a weaker global backdrop, with rising oil prices, higher bond yields and renewed geopolitical tensions weighing on investor sentiment.

The rand also softened against major currencies, weakening 0.24% against the US dollar to R16.26, 0.13% against the pound to R22.01 and 0.18% against the euro to R18.83. The currency's move came as global markets reassessed the outlook for inflation and interest rates amid higher oil prices and rising bond yields.

Commodity markets were mixed. At 21h33 SAST, Brent crude marked an increase of 0.22%, trading at $91.07 per barrel as uncertainty around the Strait of Hormuz and limited progress in US-Iran negotiations continued to support oil prices. Precious metals moved in the opposite direction, with gold falling 1.33% to $4 356.163 per ounce, while silver and platinum declined almost 3% and 3.49%. The weakness in precious metals came as rising global bond yields reduced the appeal of non-yielding assets.