United States

Wall Street closed lower on Wednesday as oil prices and bond yields rose. The S&P 500 fell 0.8% to 7,706.03, the Dow Jones Industrial Average lost 0.7% to 51,511.59 and the Nasdaq 100 dropped 0.9%. Communication services led losses in 10 of the 11 sectors, and energy was the only sector to gain.

The 10-year Treasury yield rose 15 basis points to 5.11%, its largest one-day increase since the April 2025 tariff rollout, after peaking at 5.13%. A $US70 billion sale of five-year notes cleared at 5.033%, the highest auction yield since 2006, and pushed the five-year yield above 5% for the first time since 2007. It closed at 5.00%.

The S&P Global flash US composite purchasing managers index rose in September to its highest level since July 2021, and US mortgage rates climbed to a more than two-year high. Fed Governor Michael Barr said in Chicago that further policy adjustments were likely needed to return inflation to the 2% target. The Fed lifted its target range to 3.75% to 4% last week, its first increase in three years. Swaps now fully price three quarter-point hikes over the next year. The probability of a hike at the late-October meeting rose to 68.6%, from 55.4% a day earlier and 8.8% a month ago.

Treasury Secretary Scott Bessent said the US and China agreed to extend the Busan agreement until 10 January. He made the comments after meeting Chinese Vice Premier He Lifeng ahead of Thursday’s summit between President Donald Trump and President Xi Jinping in Washington.

In company news, Stifel upgraded Microsoft to buy from hold. Walt Disney is raising prices on several US streaming subscriptions for the sixth time in six years. McDonald’s has set aside about $US8.5 billion to help franchisees implement a multiyear plan covering food, service and restaurant operations. Nvidia credit default swaps now rank among the most traded in the US market following the company’s $US25 billion bond sale in June.

Europe

The Stoxx 600 fell 0.4%, with higher oil prices and bond yields outweighing better-than-expected business activity data. The FTSE 100 finished little changed at 10,705.26.

Energy rose 1.3%, the only sector to post a material gain. Repsol added 3.1% to a record close, and JPMorgan upgraded BP and cut TotalEnergies. Insurers fell 1.7%, the weakest sector. Allianz lost 4.0%, and Sampo dropped 4.9% after an investor sold shares at a discount.

Investors continued to assess new agentic AI tools from Meta and others. Insurers and telecoms, sectors that rely on consumer inertia, underperformed. Online platforms also fell, with Vend Marketplaces down 7.2%, Scout24 down 5.2%, and Rightmove and Autotrader lower. Teleperformance rose 5.1% after Morgan Stanley said call centre operators could benefit from AI-driven agents.

Mercedes-Benz and Volkswagen each fell 3.1% after Chinese brands took another record share of the European car market last month. Deutsche Bank lost 3.0% after saying third-quarter investment banking fees would be flat or lower. Arcadis fell 2.9% after WSP Global withdrew its takeover offer. Defence firm CSG rose 5.7% after an upgrade, the best individual performance. Ryanair slipped 1.1% after trimming winter flight frequency as oil prices rose. H&M reports on Thursday.

*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.

Commodities and currencies

Brent crude rose 3.9% to settle at $US103.08 a barrel. West Texas Intermediate added 0.6% to $US92.70 in early Asian trade. Iranian President Masoud Pezeshkian said Iran would not allow freedom of navigation through the Strait of Hormuz while sanctions and a US blockade remain in place.

Gold fell as much as 2% to around $US4,275 an ounce as yields rose, and traded at $US4,294 in early Asian trade. Copper fell 0.9% to $US14,618 a tonne on the London Metal Exchange, its first daily decline since 14 September, after reaching a record $US14,875 earlier this month. Goldman Sachs expects uncertainty around US critical minerals tariffs to persist. Iron ore futures slipped 0.1% to $US96.85.

The Bloomberg Dollar Spot Index rose 0.6%, and the US dollar strengthened against all major currencies. The Australian dollar fell 1% to US70¢, its lowest level since early August. The yen traded at 158.29 per dollar, near a three-week low, and the euro held at $US1.1386. Bitcoin rose 0.3% to $US84,448.

Economic Calender

US:

• Initial Jobless Claims 22:30
• New Home Sales 00:00