Global shares stumble while bond yields climb on inflation worries By Sinéad Carew and Sophie KiderlinFri, May 15, 2026 at 9:30 PM UTC 0 By Sinéad Carew and Sophie Kiderlin NEW YORK/LONDON, May 15 (Reuters) Global equity indexes fell on Friday while bond yields soared as investor euphoria over technology stocks gave way to inflation fears and traders raised bets that the Federal Reserve will hike interest rates this year. U.S. President Donald Trump left China on Friday with no major breakthroughs on trade or tangible help from Beijing to end the Iran war.
Global shares stumble while bond yields climb on inflation worries
By Sinéad Carew and Sophie KiderlinFri, May 15, 2026 at 9:30 PM UTC
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By Sinéad Carew and Sophie Kiderlin
NEW YORK/LONDON, May 15 (Reuters) - Global equity indexes fell on Friday while bond yields soared as investor euphoria over technology stocks gave way to inflation fears and traders raised bets that the Federal Reserve will hike interest rates this year.
U.S. President Donald Trump left China on Friday with no major breakthroughs on trade or tangible help from Beijing to end the Iran war.
And uncertainty over a Middle East peace deal drove oil prices higher, adding to concerns about inflationary pressures after two batches of high inflation readings for April were released earlier this week.
The S&P 500 and the Nasdaq sold off after climbing to closing records on strength in artificial intelligence-related technology stocks in the previous two sessions.
“There’s a realization that the market had gotten way ahead of itself. It wasn’t paying enough attention to what the bond market and economic data was telling it. It was caught up in this momentum AI trade,” said Kenny Polcari, chief market strategist at Slatestone Wealth.
"The market is finally paying attention to what the bond market and the economic data is telling it. Inflation remains sticky and is potentially going to move higher in the months ahead."
On Wall Street the Dow Jones Industrial Average fell 537.29 points, or 1.07%, to 49,526.17, the S&P 500 fell 92.74 points, or 1.24%, to 7,408.50 and the Nasdaq Composite fell 410.08 points, or 1.54%, to 26,225.15.
Still, the S&P 500 logged its seventh straight weekly gain, its longest winning streak since late 2023. But the Nasdaq and the Dow fell on the week, with the Nasdaq snapping a six-week winning streak.
MSCI's gauge of stocks across the globe fell 17.06 points, or 1.53%, to 1,099.00.
Earlier, the pan-European STOXX 600 index finished down 1.48%. MSCI's broadest index of Asia-Pacific shares outside Japan fell 2.5% and Japan's Nikkei slid 1.99% after data showed wholesale inflation accelerated to 4.9% in April, the fastest pace in three years, keeping the Bank of Japan on track to raise rates.
In South Korea the Kospi index fell more than 6% on Friday after a steep run higher in recent months. It is still up 77.8% year to date.
In government bonds, U.S. Treasury yields climbed to their highest levels in a year as elevated oil prices added to fears that ongoing energy disruptions in the Middle East could add to inflation.
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The yield on benchmark U.S. 10-year notes rose 13.8 basis points to 4.597%, from 4.459% late on Thursday while the 30-year bond yield rose 10.9 basis points to 5.122%.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 8.7 basis points to 4.079%, from 3.992% late on Thursday.
In currencies, the dollar rose for its fifth consecutive day, placing it on track for its biggest weekly gain in two months, as the inflationary pressures drove bets for a Fed rate hike this year.
Traders were last betting on a roughly 38.8% chance of a 25 basis point rate hike by year-end compared with a less than 14% probability a week ago, according to CME Group's FedWatch tool, which showed a 9.9% chance rates would be 50 basis points higher by year end.
Friday is Jerome Powell's last day as Fed Chair before he is replaced by Kevin Warsh. The incoming Chair was nominated by Trump, who has pressured Powell to cut interest rates.
“The market is going to test Kevin Warsh. They’re going to press him to see what he really stands for,” Polcari said.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.33% to 99.28, with the euro down 0.38% at $1.1624.
Against the Japanese yen, the dollar strengthened 0.25% to 158.74.
Sterling fell for the fifth straight day, and hit its lowest in more than five weeks. It was last down 0.61% at $1.3318 after sliding 0.9% on Thursday.
Britain's governing Labour Party said it agreed to let Greater Manchester Mayor Andy Burnham seek a return to parliament, a step toward a possible challenge to Prime Minister Keir Starmer's leadership. Meanwhile British Housing Minister Steve Reed urged Labour Party lawmakers to get behind Starmer, saying nobody positioning to replace him had shown enough support.
Oil prices rallied on supply worries after Foreign Minister Abbas Araqchi said Iran has "no trust" in the U.S. and is interested in negotiating only if Washington is serious. Trump said he was running out of patience with Iran and that he and Chinese leader Xi Jinping agreed that Iran cannot have a nuclear weapon and must reopen the Strait of Hormuz.
U.S. crude settled up 4.2%, or $4.25, at $105.42 a barrel while Brent rose to $109.26 per barrel, up 3.35%, or $3.54, on the day.
Among precious metals, gold fell to a more than one-week low under pressure from the rising dollar and Treasury yields as well as the bets for higher interest rates.
Spot gold fell 2.35% to $4,540.11 an ounce. U.S. gold futures fell 3.29% to $4,524.30 an ounce.
(Reporting by Sinéad Carew and Stephen Culp in New York, Sophie Kiderlin in London and Stella Qiu in Sydney; Editing by Sam Holmes, Mark Potter, Joe Bavier, Barbara Lewis and David Gregorio)
Source: "AOL Money"
Source: Money
Published: May 16, 2026 at 01:18AM on Source: RED MAG
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