Today, major U.S. stock indexes are experiencing declines, with the S&P 500 down -0.92%, the Dow Jones Industrial Average down -0.75%, and the Nasdaq 100 down -1.55%. Crude oil prices surged over +2% due to escalating geopolitical tensions, particularly concerning Iran and the Strait of Hormuz, resulting in rising inflation expectations and pushing the 10-year U.S. Treasury yield to a 19-year high of 5.27%.
In economic news, a new plan to cut tariffs on $30 billion worth of imports between the U.S. and China was reported, while the September Dallas Fed manufacturing survey showed a smaller-than-expected decline, falling only -1.8 to 9.8 compared to the anticipated 7.8. Markets are currently pricing in a 68% likelihood of a 25 basis point Fed rate hike at the upcoming FOMC meeting on October 27-28.
Internationally, the Euro Stoxx 50 gained +0.57%, while China’s Shanghai Composite dropped -1.67% to a 1.75-month low. European government bond yields also climbed, with the 10-year German Bund yield reaching a 17-year high of 3.65% amid comments from ECB President Christine Lagarde regarding potential growth impacts from rising interest rates.
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