Stocks Rebound as Oil Slides, But Fed Hike Fears Still Cap the Upside

Global equity markets staged a partial rebound on Friday, September 11, after several sessions of risk-off selling driven by surging oil prices and rising bond yields. Brent crude, the key global oil benchmark, had briefly traded above $100 per barrel earlier in the week, stoking fears of renewed inflation. On Friday, however, prices dropped roughly 3%, easing some of that pressure and giving stocks room to bounce.

The relief was far from complete. The yield on the U.S. 10‑year Treasury note remained close to 4.9%, near its highest levels since 2023, underscoring expectations that the Federal Reserve could still deliver another rate hike at its upcoming meeting. While the latest consumer price index data broadly matched forecasts, investors continue to focus on the prospect of "higher for longer" interest rates and what that means for equity valuations.

Geopolitical tensions around Iran and concerns about crude supply remain in the background, keeping markets sensitive to every move in energy prices. For now, lower oil has provided a short‑term tailwind to equities, but the interplay between energy, inflation and monetary policy is likely to keep volatility elevated. For Japanese investors, tracking global oil prices together with U.S. yields is becoming an essential part of assessing overall risk appetite.