Live updates: Oil back on the rise as Iran denies report of deal talks

It’s been a volatile session in the bond market, but the 10-year yield is currently higher by another 6.7 basis points, to a near two-decade high of 5.183%.

The 30-year yield is higher by 7.1 basis points to 5.473%.

U.S. stocks, though, have reversed early session declines, with the Nasdaq and S&P 500 each back to flat with about 40 minutes left in Thursday’s session.

Bitcoin continues in a very tight range just above $84,000.

U.S. and Iranian negotiators are discussing a phased agreement to end the war, according to a Reuters headline.

The deal would include a reopening of the Strait of Hormuz, and D.C. lifting its economic blockade of Iran.

The major obstacle in talks, according to Reuters, citing Iranian, regional, and Western sources, is neither side wanting to be the first to surrender its leverage. Thus, the phased approach — Iran reopening the Strait in exchange for the Trump administration to potentially give the Iranian government access to frozen assets.

For the moment, the news has sent oil lower by nearly $2 per barrel, though it’s still up 2% for the day. That’s easing interest rates by a couple of basis points, with the Nasdaq trimming an earlier 0.8% decline to just 0.2%.

Bitcoin has bounced a bit, now trading at $84,600, up 0.5% over the past 24 hours.

“The best I can say about underlying inflation this year is that it hasn’t gotten worse,” said Federal Reserve Bank of Philadelphia President Anna Paulson on Thursday morning.

“Underlying inflation is running in a range of about 2.5 to 3 percent, well above our 2 percent target, and that gap has shown little sign of closing.”

“Looking ahead, if conditions evolve as I expect, some modest further tightening may be warranted.”

Earlier, Paulson’s colleagues John Williams (New York) and Tom Barkin (Richmond) expressed similar sentiments.

U.S. interest rates are edging lower early Thursday following yesterday’s bond market crash.

The 10-year Treasury yield is down 2.4 basis points to 5.092%, and the two-year yield is down 3.9 basis points to 4.856%.

That’s helping risk assets — the Nasdaq has trimmed a 1%+ decline to just 0.5%, and bitcoin has climbed to $84,300 from a session low of roughly $83,000.

Attempting to explain the Fed’s decision to raise rates last week, said Richmond Fed President Tom Barkin, more or less said that “passing” inflationary shocks are not so passing anymore.

“New tariffs are still cropping up,” said Barkin. “The conflict in the Middle East is ongoing. And the AI build-out continues to stress those supply chains.”

As for future policy, Barkin isn’t yet committed to supporting additional rate hikes.

“I’m open to the possibility that inflation could come back down in short order. Some of these recent shocks could reverse. Consumers could start to reach their limit. The investment boom could slow. Markets could correct. Employment could falter, making the labor market the problem child.”

The U.S. employment market remains in strong shape, per government statistics.

Initial jobless claims last week remained at historically low levels, coming in at 197,000 versus 196,000 previously. Economist forecasts had been for a small rise to 201,000.

“The dilemma,” wrote Jeff Gundlach, founder of fixed-income management giant Doubleline Capital.

“If the Fed hikes it will worsen the interest expense problem (since so much borrowing is at the short end). If the Fed cuts it will worsen the inflation problem.”

Bitcoin BTC$84,381.12 is trading at $83,500 two hours prior to the U.S. market open, down 2.55% over the past 24 hours. Ether ETH$2,695.60 and solana (SOL) are down closer to 3%, and XRP (XRP) is lower by 7.5%.

U.S. stock index futures are pointing to a second day of declines, the Nasdaq down 0.9% and the S&P 500 off 0.5%.

The bond market is steady early Thursday following yesterday’s plunge that saw the U.S. 10-year Treasury yield surge nearly 20 basis points to its highest level in more than 19 years.

Thursday will bring Initial Jobless Claims, which are expected to continue showing extreme strength in the U.S. employment market. There will also be New Home Sales for August as well as a couple of Fed speakers.