World Street | US treasury yields at 14-month high, Crude continues to sizzle, and more

World Street offers a sneak peak into top global news

In this edition of World Street, we cover a range of global financial moves, from the US markets' mixed performance to the surge in oil prices. The Dow outperformed while the Nasdaq slipped, and Asia-Pacific markets followed suit with a varied response.  Additionally, we will look into the latest moves by the US government on AI export restrictions and the continued impact of sanctions on Russian oil. Read on for more details on these market trends and geopolitical shifts.

Overnight in the US, the Dow Jones Industrial Average rose, outperforming the broader market, while the Nasdaq Composite fell as investors continued to sell off key tech stocks that had driven the bull market. The 30-stock Dow gained 0.86 percent, the Nasdaq dropped 0.38 percent, and the S&P 500 edged up 0.16 percent. All three major indices have seen declines over the past two weeks, with tech stocks contributing most of the losses.

Asia-Pacific markets were mixed this morning following a volatile session on Wall Street, where the Dow surged and the Nasdaq declined as investors shifted away from tech stocks. Australia’s S&P/ASX 200 gained 0.29 percent, recovering after three consecutive sessions of losses. Japan’s Nikkei 225 dropped 1.29 percent, while South Korea’s Kospi traded near the flatline. Hong Kong’s Hang Seng index increased by 0.15 percent, and mainland China’s CSI 300 rose 0.24 percent.

The 10-year Treasury yield reached a new 14-month high as investors focused on upcoming key inflation data. The yield on the 10-year Treasury was last up by around 2 basis points, at 4.79 percent, the highest level since November 1, 2023. This followed a significant jump in the 10-year Treasury yield on Friday after a stronger-than-expected jobs report.

Bitcoin briefly fell below the $90,000 mark overnight as investors continued to sell off growth-oriented assets like crypto and tech stocks. The price of the leading cryptocurrency dropped nearly 1 percent to $93,737 to begin the week, according to Coin Metrics. At one point, it dipped as low as $89,25. Bitcoin has declined 9 percent over the past week.

The Chinese government is reportedly considering a plan for Elon Musk to acquire TikTok’s US operations to prevent a ban, according to media reports. This is one of several options China is exploring as the US Supreme Court decides whether to uphold a law requiring ByteDance to divest TikTok’s US business by January 19.

The US government announced it would impose further restrictions on AI chip and technology exports, aiming to keep advanced computing power within the US and its allies while limiting China's access. The new regulations will cap AI chip exports to most countries, allow unlimited access for close allies, and maintain export bans to China, Russia, Iran, and North Korea.

Oil extended its gains for a third session overnight, with Brent crude rising above $80 a barrel to its highest level in over four months. The increase was driven by broader US sanctions on Russian oil and the expected impact on exports to major buyers India and China.