U.S. stocks slid at midday Thursday as a 6% spike in crude oil and a jump in long-dated Treasury yields to their highest levels since 2007 hardened bets that the Federal Reserve will raise interest rates next week.
West Texas Intermediate crude jumped 5.6% to $101.43 a barrel, while Brent climbed 5.5% to $106.78. Trump told reporters Wednesday that “right after the election, oil prices are going to be tumbling downward,” while the futures curve is pricing a conflict that outlasts November.
Treasuries sold off across the curve. The 10-year yield rose 8 basis points to 4.93%, its highest since 2023, while the 2-year added 9 basis points to 4.53% and the 30-year climbed 5 basis points to 5.35%, a level last seen in May 2007.
The trigger was August producer prices. Headline PPI rose 0.4% month-over-month, in line with forecasts, but the annual rate accelerated to 5.4% from a revised 4.8%, topping the 5.3% consensus.
CME FedWatch odds of a rate hike at next week’s meeting climbed to roughly 70% from about 62% before the release, with August CPI due Friday morning.
