Global markets sell off as oil volatility and US bond yields weigh

WASHINGTON, 24 SEPTEMBER 2026 —

European stocks opened lower on Thursday as oil prices and US Treasury yields climbed, with Germany’s DAX down 0.49% to 25,287.42, France’s CAC 40 off 0.37% to 8,093.68, and the Euro Stoxx 50 down 0.41% to 6,273.71.

The moves reflect investor concerns over Middle East tensions and rising US bond yields, which pressure risk assets and could impact Malaysia’s energy-sensitive sectors.

Oil prices fell in early trading, with Brent crude at $102.22—a decline of 0.83%—while US crude lost 0.82% to $91.40. The drop follows weeks of elevated prices amid geopolitical risks, including Iran’s attacks on Red Sea shipping lanes. While diplomatic talks between the US and Iran remain ongoing, no concrete progress has been made to ease supply concerns.

For Malaysian traders, higher fuel costs could squeeze corporate margins, particularly for manufacturers and logistics firms, while also testing Bank Negara Malaysia’s ability to manage currency volatility.

The US bond market drove overnight losses, with the 10-year Treasury yield jumping to 5.10% from 4.96% the prior day, its highest level since 2007. The surge followed stronger-than-expected US economic growth data, reinforcing fears of persistent inflation. Wall Street sold off sharply, with the S&P 500 down 0.8% to 7,706.03, the Nasdaq off 1.1% to 26,936.04, and the Dow Jones Industrial Average dropping 0.7% to 51,511.59.

Federal Reserve Governor Michael Barr’s warning this week that “further rate hikes are likely” added to market jitters, dampening risk appetite.

Japan’s Nikkei 225 bucked the trend, rising 1.3% to 65,883.41 on AI-driven demand for semiconductors, while most Asia-Pacific markets underperformed. Australia’s S&P/ASX 200 fell 0.7% to 8,700.50, Hong Kong’s Hang Seng dipped 0.5% to 24,715.95, and Shanghai’s Composite lost 0.8% to 3,902.33. South Korea’s markets remained closed for the Chuseok holiday.

The yen, however, showed little reaction to Japan’s recent interest rate hike, weakening to 157.94 per US dollar—a drag on oil-import costs for Asian economies.

For Malaysian investors, the dual pressures of oil volatility and US bond market turbulence carry clear implications. Higher energy prices could squeeze corporate earnings, particularly for firms in manufacturing and transportation, while tighter global financing conditions may deter foreign capital flows. Bank Negara Malaysia has previously warned of external risks, particularly from US monetary policy, which could limit the central bank’s ability to stabilize the currency in a prolonged bond market rally.

Currency markets remained subdued, with the US dollar edging down to 157.94 yen from 158.30 yen, and the euro holding near $1.1382. The ringgit stayed flat against the greenback, reflecting limited immediate reaction to the global sell-off. However, prolonged US Treasury yield spikes could strain domestic liquidity, particularly if foreign capital flows weaken.

Looking ahead, traders will focus on the Federal Reserve’s next policy meeting in September, where further rate hikes could be signaled. Meanwhile, Iran’s refusal to engage in substantive talks with the US and its allies keeps oil markets on edge. For Malaysian policymakers, the dual pressures of higher oil prices and tighter global liquidity will require careful monitoring—especially as domestic inflation remains sticky and fiscal constraints limit stimulus options.

Related: Federal Reserve · Michael Barr