Overview
- U.S. Treasury yields climbed to multi-year highs this week, with the 10-year around 5.16–5.20% and the 30-year near 5.46–5.49%, which narrows the earnings yield gap that makes stocks less attractive versus bonds.
- Reports that Washington and Tehran discussed a phased reopening of the Strait of Hormuz pushed oil down from a spike but left crude elevated in the low $90s to about $98–$100 a barrel, keeping inflation risks in place.
- Several Federal Reserve officials signaled that another rate increase this year may be appropriate, so upcoming U.S. jobs and inflation releases are being watched as potential triggers for further policy moves.
- Stock indices have been held up by gains in a small group of AI and big-tech names even as market breadth is weak and higher borrowing costs have pushed the average 30-year mortgage back above 7%.
- Traders are looking for concrete steps on Hormuz, stabilization in long-term yields and the next economic data; persistent high yields and oil prices would raise borrowing costs for households and businesses and could tighten credit conditions.