Global markets were mixed on Thursday as strong technology shares contrasted with continued pressure from elevated government bond yields.
Wall Street ended Wednesday on a mixed note, with the S&P 500 falling 0.3% and the Dow Jones Industrial Average losing 0.9%, while technology strength helped the Nasdaq Composite gain 0.2%.
The US 10-year Treasury yield reached around 5.3%, its highest level since 2002, as stronger economic data outweighed some of the relief provided by softer-than-expected inflation.
Asian equity markets were divided. Japan’s Nikkei 225 jumped more than 3%, helped by gains in semiconductor stocks, while the broader Asia-Pacific market outside Japan slipped 0.2%.
Australian stocks were notably weaker, with the ASX 200 closing 1.9% lower at 8,622.10, a decline of 167.20 points. Mainland Chinese markets remained closed for a holiday.
Energy prices moved sharply lower. Brent crude fell 1.4% to US$96.64 a barrel, while West Texas Intermediate dropped 1.7% to US$88.85 as concerns over Middle Eastern supply disruption continued to ease.
Energy prices remain an important inflation concern. Brent crude futures rose 42% during the July-to-September quarter, as uncertainty surrounding the Middle East kept supply risks elevated.
Precious metals moved in the opposite direction. Gold rose 0.8% to US$4,219 an ounce and silver gained 1.9% to US$61.72, while copper edged 0.2% higher.
For investors, the central tension remains between strong technology earnings expectations and a much higher global cost of capital. Falling oil is helping reduce some inflation pressure, but with the US 10-year yield still above 5%, bond markets remain the dominant macro risk for equities.
For investors, the contrast is becoming increasingly pronounced: AI-driven earnings expectations continue to support technology shares, while the global bond market is repricing the cost of capital sharply higher. The durability of equity gains will therefore depend partly on whether government bond yields stabilise or continue pushing towards new multi-decade highs.
