U.S. Futures, Global Markets Fall; Treasury Yields, Oil Rise

By Dow Jones Newswires Staff

U.S. Futures and global markets fell, while oil rose with little information coming from the summit between Presidents Donald Trump and Xi Jinping, and continued uncertainty over the Middle East war.

The two leaders agreed that the Strait of Hormuz should remain free. China also offered to spend more on U.S. oil and cut spending on Iranian oil, according to the White House.

Treasury yields rose as the continued closure of the Strait rules out Federal Reserve rate cuts, while high oil prices also hit sentiment.

Sterling is at a five-week low against the dollar and the euro over fears U.K. Prime Minister Keir Starmer will face a drawn-out leadership challenge. The ten-year gilt yields were up on political uncertainty and also inflation concerns over high oil prices.

--U.S. Futures were lower after the tech heavy Nasdaq and S&P 500 hit record closes again on Thursday, as the AI train keeps rolling. Nasdaq futures are down 1%, the S&P is 0.6% lower and the Dow Jones Industrial Average is down 0.4% after hitting the 50,000 mark for the first time since February. Cerebras Systems jumped nearly 70% on its first day of trading, while Cisco Systems shares were up 13%.

--Asian equities ended broadly lower on Friday after the recent rally. South Korea's Kospi briefly topped the 8,000 mark for the first time before falling sharply as investors locked in gains. Japan's Nikkei Stock Average in Japan lost 2.0%, while Hong Kong's Hang Seng Index retreated 1.6%. Trump ended his Beijing trip today. While the visit struck a stabilizing tone, it hasn't yielded any concrete results so far.

--European markets opened lower Friday, breaking a two-day winning streak, with mining stocks leading the charge on lower precious-metal prices. Silver and gold miner Fresnillo shares are down 5.7%, while Antofagasta and Anglo American shares are down 6.1% and 4.7%, respectively. The Europe-wide Stoxx 600 index is down 0.8%, while Germany's DAX is 1% lower. London's FTSE 100 index is down 0.8%, while France's CAC 40 is 0.9% lower.

--The dollar rose to an 18-day high against a basket of currencies as Iran war tensions persist and recent higher-than-expected prices data fuel speculation the Fed could pivot toward raising interest rates. The market is now pricing in a 60% chance of a 25 basis-point rate rise by year-end and fully pricing in a move by March 2027, LSEG data show. The DXY dollar index rose to a high of 99.202.

--Sterling fell to a five-week low against the dollar and the euro on the prospect of Prime Minister Keir Starmer facing a drawn-out leadership challenge. Greater Manchester Mayor Andy Burnham said he would ask to run in a special election after Labour lawmaker Josh Simons said he would resign to make way for him to return to parliament. "Market's fear is that Burnham would be more left-leaning, and we could see further increase in deficits," Jefferies economist Mohit Kumar says in a note. Sterling fell as low as $1.3332 and the euro rose to a high of 0.8727 pounds, LSEG data show.

--U.S. Treasury yields rose in Asian trade. The two-year Treasury yield hit 4.064%, the highest level since February 2025, according to Tradeweb. The 10-year Treasury yield rose to a one-year high of 4.530%, while the 30-year yield rose to 5.071%, the highest since July 2025, according to Tradeweb. After having hit these levels, yields have come lower but continue to trade 6-8 basis points higher on the day, according to Tradeweb.

--Eurozone government bond yields rose in opening trade, tracking higher U.S. and Japanese bond yields. Inflationary pressures, high oil prices, the continued closure of the Strait of Hormuz and political turbulence in the U.K. are among the drivers. The 10-year German Bund yield rose 5.2 basis points to 3.104%, according to Tradeweb.

--Yields on U.K. government bonds climbed due to inflation concerns caused by rising oil prices and U.K. political uncertainty. Growing demands for the U.K. Prime Minister to step down and the global oil supply shock are contributing to the rise in gilt yields, Tickmill Group's Patrick Munnelly says in a note. Ten-year gilt yields rose 9.7 basis points to last trade at 5.101%, Tradeweb data show.

--Oil prices gained more than 1.5% as Trump's meeting with Xi ended with few concrete agreements. Trump told reporters that both he and Xi want the conflict in the Middle East to end and for Iran not to have a nuclear weapon. However, tensions between Washington and Tehran continue, with little progress toward a lasting peace agreement. In early European trading, Brent crude rose 1.3% to $107.10 a barrel, while WTI futures were up 1.6% to $98.48 a barrel. Both benchmarks are headed for weekly gains of 5.8% and 3.2%, respectively.

--Gold prices dropped below $4,600 a troy ounce, pressured by a stronger dollar and rising Treasury yields as a surge in U.S. inflation fuels fears of higher interest rates. In early trading, gold futures in New York fell 2.2% to $4,580.80 a troy ounce, while silver plunged 7% to $79.33 an ounce. "The stronger-than-expected rise in consumer and producer prices raised concerns that the Fed may need to increase interest rates in the short term," analysts at ANZ say. The rise in U.S. two-year and 10-year Treasury yields reduce demand for non-yielding assets like gold and silver.

Write to Barcelona Editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

May 15, 2026 04:35 ET (08:35 GMT)