US stocks fell for a fourth straight day, their longest slide since June, as the relentless climb in oil prices and fresh evidence of sticky inflation boosted Treasury yields and bets the Federal Reserve will lift interest rates.
The S&P 500 Index dropped 0.6% on Thursday to the lowest since July, while the Nasdaq 100 Index shed 1.1%. With tensions in the Middle East flaring, West Texas Intermediate crude oil surged around 7% to about $103 a barrel, the highest since May.
Treasury yields rose across maturities, with 10-year rates topping 4.9%, a multiyear high. Yields climbed further on Thursday afternoon after the US government purchased less 10- to 20-year securities than investors anticipated in Treasury Secretary Scott Bessent’s first expanded buyback operation. The VIX rose a point to 18, the volatility gauge’s highest level in more than a month.
A report Thursday showed the US producer price index rose 0.4% in August from July — the most since May. Earlier, European Central Bank President Christine Lagarde said the region’s inflation would remain well above target into 2027.
“A hot US PPI print and a hawkish-sounding Christine Lagarde both speak to a reality that points to the possibility a global central bank rate-hike cycle may be in the offing, which does not support risk assets today or in the short term,” said Joe Brusuelas, chief economist at RSM US LLP.
Investors will look next to Friday’s report on US consumer prices, which will help set expectations for next week’s Fed decision. On Thursday, traders boosted expectations for a hike next week to about 70% and fully priced in a move by October.
“Yields and oil probably need to come down in order for stocks to work,” said Stephanie Roth, Wolfe Research’s chief economist. That could happen, for example, if Friday’s inflation data were to “come in quite soft.”
The prospect of higher borrowing costs is a headwind for equities, in particular growth shares sporting lofty valuations.
“Higher bond yields weigh on valuation multiples, which tends to be most acute for stocks with high multiples,” said Andrew Graham, partner at Jackson Square Capital. He cited the mix of more expensive crude oil, PPI data and the “fiscal messaging” behind President Donald Trump’s promise of a $5,000 payout to voters for electing Republicans as drivers for Thursday’s yield climb.
Also ahead are results from Oracle Corp., due after the close, that are set to test tolerance for artificial-intelligence spending.
In single-stock news, Apple Inc. climbed 3.6% as analysts were generally positive on the company’s new foldable iPhone.
Adobe Inc. fell 2.4% ahead of its post-market earnings report. While the “whole software space has spiked off its lows as investors temper their AI disruption/displacement fears,” Vital Knowledge founder Adam Crisafulli wrote, “many feel stocks like Adobe still face a lot of secular risk.”
Department-store stock Macy’s Inc. retreated as investors weighed better-than-expected second-quarter profit and comparable sales against less robust third-quarter guidance.
In exchange news, Nasdaq Inc. was said to be investing $100 million in Kraken parent Payward at a $21 billion valuation as it builds out infrastructure that supports trading stocks in tokenized form.
Sectors in Focus
Copper stocks fell after the White House was said to be assessing refined copper tariffs as it balances worries about higher prices against the potential benefits of encouraging more domestic mining. Freeport McMoRan Inc. shed 6.6%, whle the Global X Copper Miners ETF dropped 7.0%.
Exchanges Cboe Global Markets Inc., CME Group and ICE as BofA analyst Craig Siegenthaler says he’s now more bullish on the sector as concern about disruption from perpetual contracts retreats.
Financial-data providers FactSet Research and S&P Global weakened after OpenAI said it’s releasing ChatGPT for Financial Services, a tool tailored to investment bankers and equity researchers.
Semiconductors, with Piper Sandler starting coverage of the sector with buy ratings for Nvidia Corp., Broadcom Inc., Advanced Micro Devices Inc. and other stocks.
