By Caitlin McCabe
Bond yields climbed sharply on Friday, sapping investors' appetite for stocks amid fears that an extended Middle East impasse will worsen inflation.
The 10-year U.S. Treasury yield jumped to 4.595%, the highest since February 2025 and its biggest one-day jump in more than a year. The 30-year Treasury yield rose to 5.127%, its highest closing level since July 2007.
The Dow industrials closed 1.1%, or 537 points, lower. The S&P dropped 1.2% and the Nasdaq composite fell 1.5%. Chip stocks in the U.S. and abroad were among the hardest hit, after rallying sharply over the past month.
The moves came as oil prices continued their climb, reigniting fears about inflation. Brent crude traded up 3.3% to $109.26 a barrel, following shifting messages from President Trump about the Strait of Hormuz. He said in an interview with Fox News after his first round of talks with Chinese leader Xi Jinping that the U.S. doesn't need the waterway open, even as energy inventories dwindle. He then told reporters that he and Xi want the conflict in Iran to end.
--Stock indexes also struggled overseas, particularly South Korea's high-flying Kospi index, which fell more than 6%. Japan's Nikkei 225 also slumped and its 10-year government bond yield settled at its highest level since 1997 after producer prices jumped in April.
--Investors are also keeping close watch of U.K. markets as pressure continues to mount against British Prime Minister Keir Starmer. Gilt yields jumped and the pound weakened against the dollar.
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(END) Dow Jones Newswires
May 15, 2026 16:23 ET (20:23 GMT)
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