Friday, September 25

Oil prices fell roughly 2% after reports that the United States and Iran were discussing a phased agreement to reopen the Strait of Hormuz. WTI settled near $92.75 a barrel and Brent near $104.45, providing equities with relief from the inflation shock that had accompanied the recent energy surge.

The move was not a clean de-escalation. Reuters also reported intensified Houthi attacks on Saudi Arabia, preserving the possibility of disruption to production or exports. That opposing risk explains why lower crude supported stocks without fully reversing concerns over inflation and global growth. The Dow rose 0.9%, while the S&P 500 and Nasdaq each gained 0.5%; chipmakers continued to lead the advance as AI enthusiasm extended the technology rally. For markets, the key variable remains whether diplomatic progress becomes physical supply relief rather than another temporary headline.

The global bond selloff moderated, but only after a severe repricing. The U.S. 10-year yield fell roughly four basis points to just above 5.16%, following a rise of more than 20 basis points over the prior two sessions. Japan supplied the sharper warning: its 10-year government-bond yield reached 3.115%, the highest since 1996, while Japanese government bonds remained under pressure.

The dollar weakened alongside yields, with the dollar index down 0.2% and the yen gaining 0.4% to ¥158.23. Reuters linked the currency move partly to Finance Minister Satsuki Katayama's comment that Donald Trump had raised yen weakness with Prime Minister Sanae Takaichi. Gold rose 0.5% to about $4,315 an ounce, reflecting continued demand for protection. The day's steadier Treasuries lifted risk assets, but historically high yields and elevated volatility left fiscal and inflation concerns intact rather than resolved.