AM 24 Sep 26: Wall Street tumbles as bond yields surge
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What is the main topic discussed in this episode?
Alisna production.
Wall Street tumbles as Bonyelds surge
A defiant Iran pushes Brent Crude back above a hundred US dollars a barrel.
and why government bonds aren't always risk-free assets. Good morning, I'm James Gruber.
And I'm James Tau, aka J T.
It's Thursday, the 24th of September, and this is the morning edition of the Comsec Market Update.
So James, it's been quite an eventful morning or session on US markets. There's a few different factors certainly weighing on the minds of investors and traders.
Why did US Treasury yields surge and what does it mean for investors?
That's right. So, firstly, US Treasury yields surged in some of the biggest one day moves for 10 year Treasuries since April last year. The 10 year yield hit its highest level since July 2007, so more than 19 years, while the two year yield hit its highest level since June 2024, just over two years. The yield between the two year and 10 year Treasuries Is at its flattest since February last year, and a flatter yield curve is often seen as an indicator for an economic slowdown ahead.
And to add to that, investors also had to digest a spike in oil prices as Iran's president vowed never to surrender at a speech to the UN General Assembly. That followed comments by US President Trump at a speech a day earlier. Having said that, both sides still seem open to a deal of some sorts.
Add to that, some comments by Fed Governor Michael Barr has also increased market expectations of another US rate hike in October, with some strong economic data in the composite PMI rating hitting five year highs, also fueling fresh inflation fears. Scott Besson and the US Treasury also announced that it will purchase a maximum of 6 billion US dollars of 20 and 30 year bonds. bonds on Thursday US time or Friday our time, similar to its last buyback about a fortnight ago.
Yeah, certainly not a dull day at all over in the United States. Unlike back at home yesterday, the ASX two hundred really only managed a small single-digit gain of seven points.
How did Iran’s defiant stance push oil prices above $100 a barrel?
We did see some losses for the energy sector, also the heavyweight financials being offset by strength uh in the materials sector. So we've now seen three days uh of single-digit moves, either high or low in the past week. So it has been In a bit of a watch and see mode here for the local market. Although this morning, the Aussie share market is actually set to see some bigger losses on the open, possibly. This is to the downside, of course, with index futures falling about 1.1%. But let's have a look at some commodities. James, we should probably start with the oil price since it certainly has made some headlines today. Can you tell us more?
Yeah, so they rose, that is, the global oil prices, as traders evaluated the Iranian president's vow to never surrender. Brinkrude futures settled up almost 4% to just above US$103 a barrel. Base metal prices were lower on profit taking and a firmer US dollar. Both copper futures and aluminium futures slipped 1.2%. Gold futures fell also on that. At stronger US dollar, the futures settled 1.3% lower at $4,318 US dollars an ounce. Meantime iron ore futures edged down, settling 0.1% lower at $97.24 a tonne.
And let's have a look at currencies as well. So global currencies were sharply lower against the US dollar, with the dollar reaching two-month highs as investors are pricing in that US rate hike cycle that we talked about earlier. So uh the one Aussie dollar currently buys about 70.4 US cents. A euro is worth just under one dollar fourteen US. Dollars uh well a US dollar buys about 158.36 Japanese yen. And now it's time to get a bit more of a deep dive into how Wall Street and European markets fared overnight. Starting in the US, the Dow Jones index, it finished lower by point seven of one percent, the S P five hundred fell about point eight of one percent, and the Nasdaq lost more than one percent down one point one percent.
So uh what more can you tell us there, James?
So the markets fell in the US, pulled down by Alphabet and Amazon, as Treasury yields climbed, and that Iranian president comment that said Tehran would never surrender to US pressure.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:02–0:41
2
Why did US Treasury yields surge and what does it mean for investors?
0:41–2:18
3
How did Iran’s defiant stance push oil prices above $100 a barrel?
2:18–5:56
4
What were the biggest moves on Wall Street – Dow, S&P 500 and Nasdaq?
5:56–7:27
5
Which sectors outperformed or lagged as yields and oil prices rose?
7:27–9:22
6
How did European markets react to higher bond yields and oil spikes?
9:22–9:47
Speakers
3 identifiedMore from CommSec Market Update
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PM 21 Sep 26: ASX treads water as rate hike looms