Dow opens 120 pts lower as oil surges and Treasury yields stay elevated

• Brent crude jumped 4.2% above $104/barrel and WTI rose 4% to around $92/barrel due to intensified Middle East tensions affecting Gulf shipping routes
• The 10-year Treasury yield touched 5.35% (highest since 2002) while the 30-year yield reached 5.73% (24-year high), weighing heavily on rate-sensitive tech and bank stocks
• Third-quarter earnings season begins next week with S&P 500 companies expected to post approximately 30% earnings growth, though higher energy costs and rates create additional margin pressure

Market Summary: Stocks Decline on Oil Surge and Elevated Treasury Yields

Market Performance:

U.S. markets opened lower on October 8, 2026, with the Dow Jones falling 127 points, the S&P 500 declining 0.28%, and the Nasdaq dropping 0.48%. The sell-off followed Wednesday's weakness as multiple headwinds pressured risk appetite.

Oil Market Developments:

Oil prices surged significantly on Middle East supply concerns. Brent crude jumped 4.2% above $104 per barrel, while West Texas Intermediate rose 4% to approximately $92. The rally stemmed from intensified attacks on shipping in the Gulf and Strait of Hormuz, raising geopolitical tensions involving Iran and potential energy supply disruptions.

Treasury Yields:

Bond markets remained under pressure with the 10-year Treasury yield reaching 5.35% (near 2002 highs) before settling at 5.28%. The 30-year yield touched 5.73%, a 24-year high, later dropping to 5.66%. Elevated yields particularly impacted rate-sensitive sectors, with technology down 2% and banking stocks falling 1.8%. Bank of America and Citigroup each declined around 1%.

Federal Reserve Outlook:

Fed Governor Christopher Waller indicated additional rate increases may be necessary to achieve the 2% inflation target. Markets expect rates unchanged at the October meeting, though a December hike remains possible.

Earnings Season Preview:

Third-quarter earnings season begins next week with major banks reporting first. The S&P 500 is expected to post quarterly earnings growth around 30%, with technology and energy sectors leading. Investors are monitoring whether companies can meet expectations amid higher borrowing costs and energy prices.

Notable Movers:

Palantir Technologies bucked the downtrend after Goldman Sachs upgraded the stock to Buy, citing expansion potential in sovereign AI and bespoke applications.