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What happened:Bond yields continued to climb on Thursday as oil prices rose amid an escalating conflict in the Middle East.
The 10-year yield (^TNX), used as a benchmark formortgage and loan rates, rose to 4.7% on Thursday, the highest level since January 2025.
The 30-year yield (^TYX) climbed to 5.19%, its highest level since May.
The long-dated bond notched its longest stretch above 5% since 2007, the year prior to the financial crisis.
Why it's important:Yields on the 10-year and 30-year remained above key psychological levels, raising concerns about mounting debt and sticky inflation, as Brent crude (BZ=F) futures on the Intercontinental Exchangejumped to $100 per barrelon Thursday.
The jump occurred after reports of tank strikes off the coast of Saudi Arabia amid escalating fighting between the US and Iran.
What else you need to know:Over the past couple of weeks, investors have largely shrugged off rising oil prices as artificial intelligence became the central theme of economic and market growth.
"The resilience of equities despite a 10-year Treasury yield of 4.65 percent and crude oil prices at $87 per barrel can be attributed to the fact that uncertainty, as measured by ten-day realized volatility, remains low," Michael Kantrowitz, chief investment strategist at Piper Sandler, wrote in a note earlier this week.
Another factor keeping the stock market resilient is earnings growth.
"As is widely understood, earnings serve as the foundation of equity valuations, and these estimates continue to trend higher," Kantrowitz wrote.
The rise in bond yields comes as worries over a Federal Reserve rate hike this year eased in recent weeks, given recent softer-than-expected inflation prints.
Firms like Goldman Sachs and UBS expect the Fed to hold rates steady this year.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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