Dow tumbles 300 points to notch 4-day drop as Treasury yields and oil prices surge

The three major averages fell for a fourth consecutive session on Thursday.

The Dow Industrials lost 316.56 points, or 0.6%, to end at 52,064.10. The S&P 500 fell 0.58% to 7,591.70, and the Nasdaq Composite dropped 0.65% to close at 26,081.72.

—Darla Mercado

The Treasury Department completed a buyback of $5.19 billion of $6 billion in long-dated Treasuries on Thursday in an effort to manage yield curves as energy prices soar due to the Iran war.

“There has been a lot of criticism – it should have been a lot bigger; it’s not going to move the needle; there’s a fiscal problem. Sure, many of those factors could be true, but If you have the tools at your disposal to manage the balance sheet, go for it. I think it’s astute,” Orlanda Bravo, managing partner of private equity firm Thoma Bravo, told CNBC.

Global benchmark Brent crude settled up 5.94% at $107.63 per barrel for the highest close since May 19 when Brent settled at $111.28 and the fifth straight day of gains.

– Tobias Burns

Keith Lerner, chief market strategist at Truist Wealth, said that the market is already digesting higher interest rates, even though the S&P 500 is down just under 2.5% from its 52-week closing high.

“Underneath the surface, we are seeing signs that these rates are actually starting to bite already,” he said. He pointed to the S&P Equal Weight, which is down 4% from its 52-week closing high, and the small-cap Russell 2000, which is off almost 5.5%.

Consumer-facing companies in the equal weight are likely to be more impacted by higher oil prices, which could lead individuals to pull back spending. Meanwhile, small-cap stocks are typically more sensitive to borrowing costs.

“The rate story, higher oil prices, and the potential of a Fed increase is just making the market more on edge,” he added.

Russell 2000 3-month.

Morgan Stanley reinstated coverage of Nike on Thursday with an underweight rating. The firm’s $31 price target suggests 17% downside from Wednesday’s close.

“[W]e think consensus embeds too much growth too soon – particularly in China – while valuation still reflects more of the old NKE/sportswear landscape than today’s fragmented market,” analyst Alex Straton said in a note to clients.

Shares hit a 52-week low on Tuesday and were last trading 1% lower.

— Michelle Fox

Consumer Staples was the best performing sector in the S&P 500 during early trading Thursday as the broader index paced for its third down day in a row.

The sector was up 0.5%, while the broader index was down 0.4%, as investors flocked to safety amid rising oil prices and bonds, generating worries about how the U.S. economy will manage both. Communication Services was also marginally higher, while the rest of the S&P’s other nine sectors were lower in Thursday trading.

— Davis Giangiulio

Heating oil futures for October delivery touched a high of $5.0189 per gallon on Thursday.

It was the highest level since April 29, 2022, when heating oil traded as high as $5.8595.

The contract last traded 4.5% higher at around $5.0159.

Heating oil futures in the past day

The jump in heating oil prices coincides with a surge in crude oil prices as traders braced themselves for the likelihood of a drawn out conflict in the Middle East. West Texas Intermediate futures jumped more than 4% to top $100 per barrel, while international Brent crude also gained over 4% to surpass $105.

—Gina Francolla, Darla Mercado

Apple shares are up in early trading on Thursday following the launch of the company’s first foldable smartphone, the iPhone Duo.

The stock is up 1% as of 10:15 a.m. ET. Wall Street analysts like the $2,000 starting price of the phone, which was below many estimates that ranged as high as $2,500.

CNBC Pro subscribers can read more here.

– Tobias Burns

Nasdaq’s venture capital arm is investing $100 million in Kraken parent Payward, partnering with the crypto firm to launch tokenized equities in 2027.

The deal is an expansion on a previous one between Nasdaq and Payward to test Nasdaq Equity Tokens. In this new phase, the companies will develop an infrastructure to distribute and trade tokenized stocks, which is the issue of digital representations of publicly traded securities on a blockchain network.

The partners expect to launch their tokenized equities in the second quarter of 2027.

Read more here.

— Tanaya Macheel

Stocks opened lower Thursday.

The Dow Jones Industrial Average dropped 195 points, or 0.4%. The S&P 500 fell 0.6%, while the Nasdaq Composite slid 0.9%.

— Sarah Min

Crude oil prices rose 4% on Thursday after fighting between the U.S. and Iran sharply escalated this week, as the war drags on into its seventh month with no end in sight.

U.S.West Texas Intermediatefuturesjumped 4.4% to $100.27 per barrel by 8:57 a.m. ET.Brent crude, the international benchmark, advanced 4% to $105.24 a barrel.

— Spencer Kimball, Justina Lee

U.S. Treasury yields hit multi-year highs ahead of the wholesale inflation report.

• The yield on the 10-year hit 4.867%, its highest level since November 2023 when it reached 4.935%
• The yield on the 2-year hit 4.449%, its highest level since July 2024 when it reached 4.460%

— Sarah Min, Nick Wells

Here are some of the names moving before the opening bell:

• Meta Platforms — The parent of Facebook and Instagram rose 1.3% following upgrade at JPMorgan. The firm sees “meaningful upside potential” as Meta rolls out its artificial intelligence models and products.
• Novartis — The Swiss drugmaker gained nearly 2% after Reuters reported a major shareholder called for an overhaul of Novartis’ board to boost corporate governance. Shares fell earlier this week after the company saw three drug trial setbacks.
• Copper miners — Copper prices fell, dragging down miners. Freeport-McMoRan and Southern Copper both tumbled about 7%.

Click here to read the full list of premarket movers.

— Michelle Fox

Macy’s shares fell more than 2% in the premarket, even after the retailer delivered a beat in its second fiscal quarter and raised its guidance.

The company posted adjusted earnings of 40 cents per share, though it was not immediately clear whether it was comparable to the 37 cents expected by analysts polled by LSEG. Revenue of $4.87 billion exceeded the $4.83 billion expected.

Macy’s is nearing the end of a three-yearturnaround planunder CEO Tony Spring that aims to spark growth and invest in locations that perform well against a challenging backdrop for department stores.

Macy’s, 1-day

Treasury yields moved higher on Thursday as traders await the release of U.S. wholesale inflation data.

The 10-year U.S. Treasurynote yield — the key benchmark for mortgage borrowing, auto loans and credit card debt — was up more than 2 basis points at 4.8589%. The2-year Treasury noteyield, which is typically more sensitive to short-term Federal Reserve interest rate decisions, increased 1 basis point to 4.4404%.

The longer-dated30-year Treasury bondyield, which moves in line with broader geopolitical risks, was up more than 2 basis points at 5.3092%.

The company also unveiled the iPhone 18 Pro, Airpods 5 and Apple Watch Series 12 on Wednesday.

Read more here.

— Chloe Taylor

The European Central Bank is widely expected to raise interest rates on Thursday, but uncertainty around the U.S.-Iran war is clouding the outlook for its longer-term policy path, market watchers say.

Markets are pricing in a 100% chance of the ECB raising its key interest rate by at least 25 basis points, according to LSEG data.

Its September meeting comes days after data showedinflationin the euro zone hit 3.3% in August, with energy inflation surging to 14.3%.

Read the full story here.

— Chloe Taylor

Asia-Pacific markets closed mixed on Thursday.

Japan’sNikkei 225 and the broad-based Topix each added 0.2% to end the day at 65,270.95 and 4,054.58, respectively.

South Korea’s Kospi slid 0.25% to 7,033.92, while the small-cap Kosdaq added 0.79% to 836.92.

Hong Kong’sHang Seng index was down 1.23% in its last hour of trade, while mainland China’s CSI 300 lost 0.53% to 4,548.39.

Australia’s S&P/ASX 200 declined over 1% to 8,819.4.

— Lee Ying Shan

UBS CEO Sergio Ermotti on Thursday said that investors have grown complacent over the past few years, even as geopolitical and economic risks have mounted.

“There has been a level of complacency in financial markets in the last few years,” Ermotti toldCNBC’s Christine Tan, adding that given the environment one would have expected considerably higher volatility.

While markets have experienced occasional bouts of turbulence, strong investment in artificial intelligence, data centers and other new technologies has helped support economic growth and financial markets, he said.

The UBS top boss cautioned that investors face an increasingly complicated environment given multiple headwinds. “New problems or new issues are emerging without any of the old ones being addressed or being closed.”

Read the full story here.

—Lee Ying Shan

Oil was little changed, giving up most gains from Thursday morning, amid worries that escalating tensions in the Middle East could further exacerbate supply disruptions.

Futures for international benchmark Brent crude for November delivery inched 0.12% lower to $101.08 a barrel. U.S.West Texas Intermediatefuturesfor October was 0.10% higher at $96.15 per barrel.

Brent

Tensions escalated after the U.S. military on Tuesday destroyed five Iranian crude oil tankers in retaliation for attempted attacks on an American warship.U.S. Central Command said the warship successfully evaded Iranian attack and no American personnel were harmed.

—Justina Lee

The pan-European Stoxx 600 was up 0.17% in early trade as most regional sectors and major bourses in the continent moved higher following the market open.

In Milan, the Italian FTSE MIB was up 0.58%, followed by the French CAC 40, which rose 0.34% in Paris. In London, meanwhile, the U.K. FTSE 100 added 0.11%, with Germany’s DAX advancing almost 0.1% in Frankfurt.

Among Europe’s sectors, telecoms, banks and utilities led gains, each notching more than 0.7%.

The 10-year Treasury yield inched higher 1 basis point higher to 4.847% on Thursday, while the 30-year yield also climbed by the same to 5.298%, as pressure at the long-end of the yield curve persisted despite the Treasury Department expanding its bond-buyback program.

Treasury Secretary Scott Bessent said Wednesday the department would buy as much as $6 billion of 10- to 20-year Treasurys on Sept. 10.

Elevated yields suggest investors remain focused on more fundamental factors including inflation risks and heavy Treasury supply, according to James Ooi, market strategist at Tiger Brokers.

Oil prices above $100 a barrel have added to inflation concerns, while investors are awaiting U.S. producer and consumer inflation data for further clues on the rates outlook.

“While Treasury buybacks can improve liquidity at the margin, the fact that yields still climbed higher suggests the market sees the long-end pressure as a fundamental rates issue tied to inflation concerns and heavy Treasury supply, rather than merely a liquidity issue,” Ooi said.

—Lee Ying Shan

DBS, Southeast Asia’s largest bank DBS, “categorically rejects and will vigorously resist” a lawsuit against it seeking $1 billion in 1MDB-linked claims.

The lawsuit was filed by claimants including liquidators of four companies: Blackrock Commodities (Global), Platinum Global Luxury Services, Affinity Equity International Partners and TKIL Global Investments.

“The Claim is for damages which the claimants have purportedly estimated at S$1.298 billion,” the bank said in a statement.

“It is a matter of public record that there have been global recovery efforts relating to 1Malaysia Development Berhad, supported by legal counsel since 2018. All this time, there was no claim against DBS,” the bank said.

1Malaysia Development Berhad, a state wealth fund set up by former Malaysian Prime Minister Najib Razak in 2009, was hurt by a massive global corruption and money-laundering scandal, for which global recovery efforts are still ongoing.

Shares of DBS fell 0.58% in early trading on Thursday.

—Justina Lee

Asia-Pacific markets opened lower Thursday, with Australian equities leading regional declines.

Australia’s benchmark S&P/ASX 200 was down 1.36%. Index heavyweights Rio Tinto and BHP Group fell 2.93% and 2.52%, respectively.

Japan’sNikkei 225 dropped 0.62%, and the Topix declined 0.56%.

South Korea’s Kospi lost 0.24%, while the small-cap Kosdaq was 0.83% lower.

— Lee Ying Shan

Asia-Pacific markets were set to fall Thursday, tracking Wall Street declines, as higher oil prices dent sentiment with the Middle East conflict dragging on.

Japan’sNikkei 225was set to fall, with its Chicago and Osaka futures contracts last at 64,350 and 64,360 respectively, compared with the index’s previous close of 65,142.78.

Hong Kong’sHang Seng indexfutures were at 24,982, lower than the index’s last close of 25,274.96.

Futures for Australia’s S&P/ASX 200 last traded at 8,816, compared with the index’s previous close of 8,911.4.

Brent futuresgained 3.4% to $101.21 a barrel Wednesday, the international benchmark’s highest closing price since May 22. U.S.West Texas Intermediatefutures advanced 3.3% to settle at $96.05.

— Lee Ying Shan

The cost of financing a home purchase hit its highest level in more than a year — and it’s creeping closer to 7%.

The rate on a 30-year fixed mortgage reached 6.97% on Wednesday, according to Mortgage News Daily. That’s the highest level since May 30, 2025.

30-year fixed mortgage rate in 2026

The last time the 30-year fixed mortgage was at 7% or higher was on May 26, 2025, when it was 7.02%.

This jump in the 30-year mortgage coincided with a surge in the 10-year Treasury yield, which leapt to 4.857% for its highest level since November 2023. Rates on 30-year mortgages are influenced by the 10-year Treasury note yield.

—Gina Francolla, Darla Mercado

Several companies saw their shares move in extended trading following earnings reports and other developments.

AeroVironment– Shares of the drone manufacturer jumped 2% after first-quarter results trounced estimates. AeroVironment earned 59 cents per share on an adjusted basis and posted revenue of $480 million. Analysts polled by LSEG sought 25 cents a share on $456 million.

American Eagle Outfitters– The teen apparel retailer slid 10%. American Eagle’s comparable sales in the second quarter declined 1%, versus analysts’ call for a decline of 0.6%. The company forecast operating income in the current quarter to range from $110 million to $115 million, versus the StreetAccount consensus estimate of $124.3 million.

Read more about Wednesday’s after-hours movers here.

—Darla Mercado