Stocks fall as oil and US bond-yield fears persist

Stock markets fell Thursday as investors questioned whether a US Treasury plan to buy more long-dated government bonds would keep yields down, while higher oil prices added to inflation concerns.

The US Treasury said it would at least double sovereign bond buybacks after the 30-year yield rose near two-decade highs amid concerns over inflation, government borrowing and possible interest-rate increases. The announcement lifted Wall Street on Wednesday and helped Asian markets rebound, but US indexes opened lower Thursday and major European markets were weaker by midday.

Around 1345 GMT, the Dow Jones Industrial Average was down 0.5% at 53,173.63, the S&P 500 was down 0.3% at 7,686.93 and the Nasdaq was down 0.6% at 26,167.02. Paris and Frankfurt were lower, while London was flat.

Oil prices rose as US-Iran peace talks remained stalled, with Tehran keeping the Strait of Hormuz shut and Washington maintaining a naval counter-blockade of Iran. Brent North Sea crude was up 2.2% at $93.78 a barrel and West Texas Intermediate was up 2.3% at $86.67.

US President Donald Trump pledged what he called “economic warfare” against Tehran and threatened countries that trade with it, dimming hopes of an imminent deal to end nearly six months of war in the Gulf.

In Asia, stocks rose after gains on Wednesday by Apple, Microsoft and Amazon. Seoul climbed nearly 6% as SK Hynix rose 12.7% after announcing a $29 billion share buyback, while Samsung gained more than 9%. Tokyo closed up 1.4%, Hong Kong rose 0.8% and Shanghai gained 0.2%.

Investors were also weighing minutes from the Federal Reserve’s July meeting, which showed many policymakers believed higher interest rates would be necessary if inflation did not decline.