Please see below the daily update article from Brooks Macdonald, received this morning – 10/09/2026:
What has happened?
Stagflation concerns lingered yesterday as Brent crude rose above $100/bbl for the first time since July. The move led investors to price in a more hawkish path for interest rates, pushing sovereign bond yields to multi-year highs. US Treasuries also came under pressure after the Treasury Department’s announcement of up to $6bn of long-dated bond buybacks fell short of market expectations. By the close, the 10-year Treasury yield (+5.2bps) had reached a post-2023 high of 4.84%, while Germany’s 10-year Bund yield (+7.6bps) rose to its highest level since 2011 at 3.44%. Higher yields weighed on risk assets, with the S&P 500 (-0.48%) falling for a third consecutive session and the STOXX 600 (-1.41%) posting its worst day in two months. Market breadth was particularly weak in the US, where 404 stocks in S&P 500 declined. Energy (+1.09%) was the S&P 500’s only advancing sector, reaching a record high.
Energy fears
The latest rise in oil prices was fuelled by a further escalation in hostilities between the US and Iran. Reports indicated that the US had destroyed five Iranian tankers, while Iran later claimed it had targeted US vessels and oil tankers in the Persian Gulf in retaliation. Investors increasingly fear a prolonged conflict that could disrupt energy supplies and delay the reopening of the Strait of Hormuz. The impact extended beyond oil. Brent crude rose +3.36% to $101.21/bbl, while European natural gas futures gained +4.49% to their highest level since 2022. Gas prices were also influenced by reports of a fire at an industrial site in Russia’s Yamalo-Nenets region, a key gas-producing hub.
What does Brooks Macdonald think?
The renewed rise in energy prices has prompted investors to reassess the outlook for inflation and monetary policy. In the US, markets modestly increased the probability of a September rate hike, reflecting concerns that higher energy costs could feed through to broader inflationary impulse. European markets also priced in a more hawkish path for the European Central Bank. Attention now turns to today’s ECB policy decision, where a 25bp hike is widely expected. As a result, investors will focus less on the decision itself and more on the ECB’s guidance and updated economic forecasts for clues on how policymakers are balancing renewed inflation risks against a potentially slowing growth backdrop.
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Cherise Lancaster
10/09/2026