Rising oil prices and mounting expectations of Federal Reserve rate hikes have pushed US Treasury yields to multi-year highs, dragging global equities down to a one-week low.

On Tuesday, the MSCI All-Country World Index slipped 0.2% to its lowest level since September 18. Nasdaq futures reversed into positive territory after falling as much as 0.5% earlier, European stocks ended mixed, and Japanese and South Korean indices closed lower. The 10-year Treasury yield added 1 basis point to 5.25% after hitting its highest level since 2007 on Monday, while the 30-year yield also rose 1 basis point to 5.56%.

On the geopolitical front, according to CCTV International News, Iran's foreign minister will return to Tehran to await a US response. Brent crude rose for a second straight day, gaining 1.2% to $99, while spot gold climbed 0.7% to $4,145 per ounce. Climbing oil prices, stronger US business activity, and concerns over towering government debt have together triggered the largest Treasury selloff since April 2025. Surging yields are driving up borrowing costs and weighing on the outlook for economic growth and corporate earnings.

Chris Larkin of Morgan Stanley's E*Trade said that amid rising yields and oil prices, the market overall lacks momentum. Given that the Fed is currently focused on inflation, unless this week's labor market data delivers a major surprise, market performance may continue to lag rate and energy markets.

Key market moves are as follows:

Nasdaq futures reversed into positive territory after earlier falling 0.5%. US memory-chip concept stocks edged higher in premarket trading, with Micron Technology up 1.6%, and SK Hynix and SanDisk up 1.4%.

The Euro Stoxx 50 opened up 0.27%, Germany's DAX fell 0.13%, the UK's FTSE 100 rose 0.19%, and France's CAC 40 gained 0.06%.

Japan's Nikkei 225 closed down 0.6% at 65,481.27. The TOPIX closed down 1.7% at 4,041.13. South Korea's KOSPI closed down 0.27% at 6,870.81.

The 10-year US Treasury yield rose 1 basis point to 5.25%.

The Bloomberg Dollar Spot Index rose 0.1%.

Spot gold rose 0.7% to $4,145 per ounce.

Brent crude rose 1.2% to $99.

Nasdaq futures reverse higher as Treasury yields swing at elevated levels

Nasdaq futures turned positive after earlier declining 0.5%. Kyle Rodda, senior market analyst at Capital.com, noted that strong corporate earnings will continue to support equities, cushioning the pressure from rising bond yields and AI valuation risks.

This week, traders will closely watch a series of US economic data to judge whether the economy remains strong enough to support further Fed tightening. The consumer confidence index and August JOLTS job openings data are due Tuesday, followed by consumer spending and inflation data, with the nonfarm payrolls report due Friday.

The 10-year Treasury yield rose to its highest since 2007 on Monday and climbed another 1 basis point to 5.25% today. After the recent bond market selloff, some investors are starting to turn bullish on bonds.

Long-term bond investor Chris Iggo said that after four difficult years, the bond market is about to rebound. Wall Street veteran Jim Bianco turned bullish on Treasuries for the first time in six years, saying, "This is value investing. If yields keep rising, I will keep buying."

Gold rebounds and oil rises as Iran confirms conveying a "7-day plan" to the US and awaits a response

Gold prices rose 0.7% to $4,145 per ounce. Earlier, gold broke below the key $4,230 support level during Asian trading hours, triggering technical selling and further sliding below its 50-day and 100-day moving averages, retreating to near August lows.

The decline was driven by a combination of factors: US real rates climbing to an 18-year high, Chinese investors concentratedly closing positions ahead of the National Day holiday, and geopolitical uncertainty sparked by Trump's rejection of Iran's ceasefire proposal. Adam Gillard, a precious metals expert at Goldman Sachs, pointed out that the combination of these factors created "one-way downward pressure" on gold. Market focus will continue to center on ETF flows, which are currently the key variable in withstanding rate pressure.

Brent crude rose 1.2% to $99. On the geopolitical front, according to CCTV International News citing Iran's Mehr News Agency on September 29, Iranian Foreign Minister Araghchi said in a media interview that day that one of the main goals of his trip to New York for the 81st UN General Assembly was to convey Iran's position on the war issue—particularly the Strait of Hormuz—to the world.

Araghchi also confirmed that he met again that day with Qatar, which is acting as a mediator, and conveyed a "7-day plan" to the US through Qatar, and is awaiting a formal response from the US through the mediator. When asked whether he would stay in New York to wait for the US response, Araghchi said he would depart for Tehran, and that once Qatar has a response, it knows how to convey it to Iran.