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Update: US Equity Indexes Fall, Treasury Yields Jump as Iran Tensions Send Crude Oil Sharply Higher

Update: US Equity Indexes Fall, Treasury Yields Jump as Iran Tensions Send Crude Oil Sharply Higher

MT newswireMT newswire2026/10/23 20:29
By:MT newswire
04:29 PM EDT, 10/23/2026 (MT Newswires) -- (Updates with index/price moves, macroeconomic data, and geopolitical news from the first paragraph.) US equity indexes fell, while government yields rose as escalating geopolitical tensions and surging crude oil prices validated concerns in a University of Michigan consumer sentiment survey that inflation will get hotter. The Dow Jones Industrial Average dropped 1.2% to 52,215.16, and the S&P 500 fell 0.5% to 7,623.68. The Nasdaq Composite declined 0.2% to 25,955.34, after trading slightly higher earlier in the session. Consumer staples, consumer discretionary, and financials led decliners. Energy, technology, and real estate were the only gainers. Fifteen of the 20 top-performing stocks in a category with market capitalizations exceeding $200 billion each were technology firms, according to data compiled by Finviz. This tech outperformance represents a recovery, as Meta Platforms' (META) plans announced Thursday to increase capital expenditure by $5 billion at the bottom end of the range for 2026 and launch a new, non-voting share class to raise funds helped spark a sell-off in the so-called AI trade. Iran has drawn up detailed plans to target undersea communications cables in the Persian Gulf if the United States and Israel attack it again, two senior Iranian security officials told Reuters. At a campaign rally in Florida, President Donald Trump said he may launch another military campaign against Iran while urging Tehran to agree to US demands to end the war, Al Jazeera, a Middle Eastern broadcaster, reported. Saudi Aramco, an oil and gas exporter from the Kingdom, has ordered the evacuation of its headquarters in Dhahran on the Gulf near Bahrain as fighting intensified with the Iran-aligned Houthis, Reuters reported. "Iranian attacks on ships in the Strait of Hormuz, Houthi attacks on the Saudis, Iran's threats to escalate the means of retaliation, and [President Donald] Trump's post about a week ago to 'finish the job' are all contributing to this sentiment," Derek Holt, head of capital market economics at Scotiabank, said in a note. An oil spill from a tanker was detected off the coast of Umm Al Quwain in the United Arab Emirates, the UAE Ministry of Climate Change and Environment said, without identifying the cause of the spill or the tanker involved, according to a separate Reuters news report. The front-month West Texas Intermediate crude oil contract jumped 4.3% to $103.70 per barrel, and global benchmark Brent advanced 3.5% to $117.15 per barrel. The rise in crude prices is adding to inflation concerns and reinforcing expectations that interest rates could remain elevated for longer, a DA Davidson research note said. US Treasury yields jumped on Friday. The 10-year yield climbed 4.6 basis points to 5%, the 30-year rate advanced 3.9 basis points to 5.33%, and the two-year yield rose 4.9 basis points to 4.68%. S&P Global's October flash reading of manufacturing conditions rose to 56.0 from 55.9 in September, versus the 55.5 forecast in a Bloomberg-compiled survey, indicating an expansion to a 53-month high. The final reading in the University of Michigan consumer sentiment index for October stood at 48.0 from the 46.3 preliminary estimate, beating expectations for no revision in a Bloomberg-compiled poll. That print was below the 48.1 final reported in September. Respondents expected a 4.7% inflation rate over the next year and 3.5% annual inflation over the next five years, both up from 4.6% and 3.4%, respectively, in September. Gold futures fell 1.2% to $4,014.2, and silver futures dropped 1.8% to $54.03.
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