As inflationary pressures, high bond yields and rising oil prices continue to affect global markets, investors have turned their focus to the nonfarm payrolls data due to be released in the United States. The data is expected to shape expectations regarding the monetary policy of the U.S. Federal Reserve.
Rising long-term bond yields are increasing global borrowing costs while intensifying pressure on equity valuations. The yield on the U.S. 10-year Treasury note reached 5.34% yesterday, while the 30-year Treasury yield climbed to 5.69%, their highest levels since 2002. The yields stand at 5.25% and 5.62%, respectively, today.
The U.S. ISM Prices Paid Index rose from 77.1 to 77.9. The data, pointing to rising raw-material costs for manufacturers, increased concerns about inflation. The dollar index reached 102.2 yesterday, its highest level since April 2025, and is trading at 101.9 today.
The December Brent crude futures price rose 6.1% yesterday to as high as $104 a barrel after reports that the United States would send additional military assets to the Middle East and that Donald Trump was reconsidering attacks against Iran. The price is trading flat at around $102.3 today.
U.S. Treasury Secretary Scott Bessent called on European partners to accelerate their existing commitments and immediately release additional supplies to the market in order to address disruptions in global diesel supplies. Gold also rose 0.3% to $4,191 an ounce as bond yields retreated.
Donald Trump said that interest rates would harm economic growth. Minneapolis Fed President Neel Kashkari said the policy rate could be raised further if the economy remained resilient and inflation proved more persistent than expected. Fed Vice Chair Philip Jefferson said interest-rate decisions would be made after assessing economic data, the outlook and the balance of risks.
U.S. and European stocks follow different paths
New York markets ended the day with limited gains as bond yields retreated from their highest levels in years. The Dow Jones rose 0.04%, the S&P 500 gained 0.19% and the Nasdaq advanced 0.04%. The number of people filing initial applications for unemployment benefits in the United States fell to 197,000 in the week ended September 26.
Nike shares fell 0.7% yesterday due to declines in the company's revenue and sales in China; the loss reached 8.5% in after-hours trading. U.S. stock-index futures started the day higher.
European stock markets came under selling pressure amid concerns over bond yields and public debt. France's 10-year bond yield rose to 4.96%, reaching its highest level since 2002. The U.K.'s 30-year bond yield also climbed above 6%, reaching its highest level since 1998.
Higher-than-expected inflation data in France, Italy and Germany, along with rising energy costs, weighed on European markets. Consumer inflation in the euro area is expected to rise to 3.7%, while the Manufacturing Purchasing Managers' Index reached 52.9 points in September, its highest level in 52 months.
The FTSE 100 fell 1.68%, the DAX 40 declined 1.03%, the CAC 40 dropped 1.62% and the FTSE MIB lost 2.21%. Christine Lagarde, president of the European Central Bank and the European Systemic Risk Board, said policymakers needed to anticipate risks to the financial system as a whole to ensure the safe use of artificial intelligence in the financial sector.
Asian stocks face selling pressure
Caution among investors ahead of the U.S. jobs data, together with rising bond yields and oil prices, limited risk appetite in Asian markets. Japan's 10-year bond yield reached 3.11% yesterday, its highest level since 1995, and stands at 3.090% today.
Inflation in Tokyo, Japan, rose year on year from 1.9% to 2.7%. The development strengthened expectations that the Bank of Japan could raise interest rates. The Nikkei 225 fell 1% and the Hang Seng declined 2.6%, while the Kospi rose 0.1%; Chinese markets were closed for a holiday.
Türkiye markets rise
The BIST 100 index on Borsa Istanbul ended the day up 2.53% at 12,249.04 points. The October futures contract based on the BIST 30 index rose 0.11% in the evening session compared with the regular session close.
The dollar/Turkish lira exchange rate ended the previous day up 0.1% at 49.0133. The exchange rate was trading at 49.1230 at the opening of interbank trading, up 0.1%.
The Capital Markets Board announced that interim payments would be made to all holders of participation units in funds undergoing liquidation whose settlements had been completed, to be deducted from their final receivables. The interim payment to each investor for each fund separately will not exceed 1 million liras.
Recep Tayyip Erdoğan said that the problem that emerged in part of the fund market had been resolved within the framework of capital-market rules, fairness and justice. Mehmet Şimşek said that the funds linked to troubled portfolio management companies had been placed under quarantine and that the liquidation process had begun.
The Central Bank of the Republic of Türkiye raised the 4.5% growth limit on loans to small and medium-sized enterprises to 5% under its reserve-requirement regulation and reduced the blocking ratios for Turkish lira reserve requirements. For the BIST 100, levels of 12,400 and 12,500 points are being monitored as resistance, while 12,100 and 12,000 points are seen as support.
Data agenda for the day
Markets will track September consumer inflation in the euro area, as well as September nonfarm payrolls, the unemployment rate and average hourly earnings in the United States. The United States will also release August factory orders and durable-goods orders data.
