Pressure builds anew in the bond market as oil prices jump. US stocks fall slightly

NEW YORK (AP) — A jump in oil prices is worsening worries about inflation, sending bond yields higher. That’s erasing some of the relief created the day before after the U.S. Treasury Department moved to ease pressure from the bond market. The S&P 500 fell 0.3% Thursday. It’s on track for a fourth loss in the five days since setting its all-time high. The Dow Jones Industrial Average dropped 416 points, and the Nasdaq composite sank 0.4%. Walmart helped lead the way lower after giving a weaker-than-expected forecast for upcoming profit. Brent crude rose 2.3% following President Donald Trump’s latest threats to Iran.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

U.S. futures are relatively unchanged after the U.S. Treasury Department said it would at least double the size of its bond buybacks, and oil prices shot higher.

The planned purchases of longer-term government debt by the Treasury could ease pressure on share prices since the maneuver would push bond yields down.

Futures for the S&P 500 were little changed on Thursday, while those for the Dow Jones Industrial Average slipped 0.1%. Nasdaq futures gained 0.1%.

Oil prices rose sharply after ballistic missile fire in United Arab Emirates triggered nationwide warnings residents there, the first time in weeks such an alarm had sounded. President Donald Trump threatened to increase economic pressure on Iran, creating more doubts about a near-term solution to the conflict.

Brent crude, the international standard, surged 2.5% to $93.90 a barrel. It was trading at roughly $72 per barrel before the war.

U.S. benchmark crude jumped 2.8% to $86.72 a barrel.

Yields on U.S. government bonds fell after the Treasury announcement. Yields have risen in recent months over growing concerns about inflation stemming from the conflict in Iran and ballooning government debt.

The national debt surpassed a record $40 trillion on Wednesday with defense spending soaring and the U.S. involvement in the Middle East.

The yield on the U.S. 10-year Treasury fell to 4.68% on Thursday, although it’s still well above its levels from before the start of the war in Iran. The 30-year Treasury yield fell to around 5.22%.

In Asia, bond yields also eased after the U.S. Treasury’s announcement. Japan’s 10-year government bond yield fell to around 2.85%. It has been trading near 30-year highs.

Walmart’s stock slid more than 6% before the market open on Thursday as the retail giant gave a cautious outlook for the year. Walmart is considered a barometer of consumer spending given its vast customer base.

Investors are also awaiting the latest U.S. unemployment data. The previous report from the Labor Department said that 209,000 people filed jobless claims two weeks ago, up from a revised 200,000 the week before and higher than the 205,000 forecasters had expected.

In Europe, Germany’s DAX fell 0.5% to 25,960.44, while the CAC 40 in Paris slipped 0.4% to 8,466.75. Britain’s FTSE 100 shed 0.3% to 10,707.92. Asian shares traded higher.

The U.S. dollar rose to 158.50 Japanese yen from 158.16 yen. The euro was trading at $1.1696, up from $1.1677.