Stocks retreat as oil whipsaws on Iran war, reserve release plans

Crude futures had steadied Tuesday, helping Wall Street to new highs, with a large amount of the support coming from a rush back into the AI trade that saw chip titan Nvidia push towards a US$6-trillion market value. — AFP pic

First Published: Thursday, 08 Oct 2026 9:08 AM MYT

NEW YORK, Oct 8 — Stock markets slid on Wednesday after a volatile day of trading for oil that saw the commodity rise sharply before closing lower after International Energy Agency member states said they were ready to release more strategic reserves.

Oil prices rose on fresh concerns about Middle East supplies following a warning that Iran appeared to be stepping up attacks in the Strait of Hormuz.

Crude futures had steadied Tuesday, helping Wall Street to new highs, with a large amount of the support coming from a rush back into the AI trade that saw chip titan Nvidia push towards a US$6-trillion (RM24.5 trillion) market value.

After rising for most of the session, oil prices ultimately closed lower on the IEA member states’ announcement.

Wall Street stocks fell, with yields on US government bonds rising to 24-year highs as investors worried about inflation and interest rates.

“The behaviour of Treasury yields, in particular the upward trending move in Treasury yields has been a limiting factor of sorts for the broader market,” said Patrick O’Hare of Briefing.com.

On Wednesday, the US Treasury auctioned US$39 billion of 10-year notes at 5.3 per cent, with market participation high.

Oil volatility 

UK Maritime Trade Operations on Tuesday said there had been nine attacks on tankers in the Strait of Hormuz this month, representing half of the September total in the waterway and the Gulf combined.

US Secretary of State Marco Rubio, however, repeated Washington’s claims that it was in control of the strait and that oil flows were at close to normal levels.

The International Energy Agency’s (IEA) member countries stand ready to release additional oil from their strategic reserves if necessary and will prioritise diesel due to tight supplies of the fuel, the head of the IEA said Wednesday.

G7 countries, in coordination with the IEA, agreed last Friday to immediately release 100 million barrels of diesel and crude oil to ease global energy supply concerns caused by fallout from the US-Iran war.

Indian stocks slipped and the rupee steadied Wednesday as the Indian central bank hiked interest rates for the first time in more than three years.

The euro fell heavily versus the dollar for a second time this week as worries about France’s high debt levels spook bond markets.

Marine Le Pen, frontrunner in the race to be France’s next president, said Tuesday she would implement €140 billion in cost savings by 2032 if elected next year, warning that without change France was heading towards default on its debt.

The pledge “has helped ease bond yields” in France even if “pushing through that level of cuts... would be a hugely difficult task”, said Susannah Streeter, chief investment strategist at Wealth Club.

Both Paris and Frankfurt stock markets fell 1.4 per cent. — AFP