Global markets retreat as stocks dip, yields rise, oil slides

[WORLD] Global financial markets faced renewed turbulence on Monday as major stock indices retreated, bond yields rose, and oil prices continued their sharp decline. The moves come amid persistent uncertainty over U.S. trade policy, shifting central bank stances, and a surprise production boost from OPEC+, leaving investors on edge as they assess the outlook for economic growth and inflation.

Stocks Retreat After Extended Rally

The MSCI global equities index fell 3.04 points, or 0.36%, to 846.21, snapping a nine-session winning streak. Wall Street mirrored this trend, with the S&P 500 and Dow Jones Industrial Average both closing lower after two weeks of steady gains. Analysts attributed the pause to renewed tariff concerns and subdued trading volumes due to public holidays in major markets including Britain, China, and Japan.

“Stocks are taking somewhat of a breather after two weeks of effectively moving higher from the early April lows,” said Sahak Manuelian, managing director and head of equity trading at Wedbush Securities.

The recent volatility follows last month’s dramatic sell-off, triggered by sweeping new U.S. tariffs that rattled global markets and prompted retaliatory measures from major trading partners. While some indices had staged a recovery, the latest data suggest that investor confidence remains fragile.

Bond Yields Rise as Inflation Concerns Persist

In fixed income markets, U.S. Treasury yields edged higher, with the benchmark 10-year note reaching 4.35% on Monday-extending last week’s gains. The uptick came as economic data showed continued resilience in the U.S. services sector and a two-year high in prices paid, a key inflation gauge.

Market participants are now closely watching the Federal Reserve, which is set to announce its latest interest rate decision later this week. Despite a recent contraction in U.S. GDP, strong jobs data and sticky inflation have led many to believe the central bank will keep rates on hold for now.

Elsewhere, India’s 10-year government bond yield is expected to soften, trading in the 6.30–6.35% range this month, as the Reserve Bank of India adopts a more accommodative policy stance and domestic liquidity improves.

Oil Prices Plunge on OPEC+ Output Hike, Demand Fears

Crude oil prices tumbled to multi-year lows after OPEC+ announced plans to increase production, defying expectations of restraint amid growing fears of a global economic slowdown. U.S. benchmark crude fell to around $57 per barrel, down from nearly $65 in mid-April, while Brent crude slid to $60, its lowest in four years.

The decision by OPEC+-led by Saudi Arabia-to boost output comes as the group seeks to discipline members who have exceeded quotas and to reinforce geopolitical alliances. However, the move has exacerbated concerns about oversupply at a time when trade tensions and recession risks threaten to curb demand.

“Oil prices have experienced a significant decline over the past month, with Brent crude oil dropping to approximately $60.00 per barrel, a four-year low,” noted analysts, citing both increased supply and weakening demand as key drivers.

The drop in global oil prices has led to lower fuel costs in several markets. For example, South Africa announced a 22-cent per liter cut in petrol prices for May, reflecting the broader trend.

Outlook: Volatility Likely to Persist

While some experts believe the recent U.S. GDP contraction will have limited impact on the global economy, the combination of trade policy uncertainty, shifting central bank signals, and commodity price swings is expected to keep markets volatile in the near term911.

European and Asian markets have shown relative resilience, but investors remain cautious as they navigate a complex landscape of economic and geopolitical risks.