US stock market LIVE updates: Nasdaq, S&P open lower amid surging Treasury yields; Oracle shares crash 5%

Hopes for an agreement to reopen the Strait of Hormuz spurred a rebound in stocks and bonds from session lows in a volatile session marked by still-elevated oil prices.

The S&P 500 erased its decline after Reuters reported that US and Iranian negotiators were exploring a phased path out of the war that would involve Tehran reopening the vital waterway and Washington lifting its economic blockade. A selloff in Treasuries also eased, though 30-year yields remained at their highest level since 2004. Brent crude traded around $104 a barrel.

Investors are demanding greater compensation to hold bonds as concerns about persistent inflation, government spending and surging corporate borrowing to finance the artificial-intelligence buildout intensify. Against this backdrop, money markets now fully reflect three Fed hikes over the next year.

The majority of stocks on Wall Street fell, with rising pressure from the bond market adding to the weakness. The yield on the 10-year Treasury climbed to 5% from 4.94% late Thursday, after topping the 5% level earlier this week for the first time since 2023.

Higher yields slow the overall economy by making it more expensive for everyone to borrow money, from the U.S. government to people looking to buy houses and businesses looking to build AI data centers. They also tend to put downward pressure on stock prices and other investments.

Yields have been climbing steadily since the COVID-19 pandemic pushed them close to zero in 2020. The ascent has accelerated recently as inflation has remained stubbornly high.

Oracle is seeking to protect itself from potential cost increases related to a large data center project in New Mexico by sending a “force majeure” notice to the project’s developer, a unit of Blue Owl, Bloomberg News reported on Thursday.

Shares of the company fell around 4% in morning trading following the report, which cited sources familiar with the matter. Reuters could not independently verify the report.

Oracle is attempting to delay payments if the data center, dubbed Project Jupiter, is derailed and fails to come online in 2028 as planned, rather than exiting as the main tenant, according to the report.

Wall Street's main stock indexes opened lower on Thursday as simmering Middle East tensions lifted oil prices and Treasury yields, while investors also exercised caution ahead of a keenly watched summit between Presidents Donald Trump and Xi Jinping.

The Dow Jones Industrial Average fell 95.8 points, or 0.19%, at the open to 51415.75. The S&P 500 fell 39.0 points, or 0.51%, at the open to 7666.99​, while the Nasdaq Composite dropped 201.5 points, or 0.75%, to 26734.508 at the opening bell, as per Reuters report

Shares of airlines and cruise operators, which are sensitive to energy prices, ticked down. JetBlue, American Airlines, Norwegian Cruise Line and Royal Caribbean edged lower in premarket trading.

Oracle lost 4.2% after a report said the company had sent a ‘force majeure’ notice to a New Mexico data centre. Shares of Blue Owl, the project’s developer, also lost 4%.

Among the movers before the bell was MGM Resorts, which dropped 10% after media mogul Barry Diller’s People Inc. withdrew its proposal to purchase the casino operator.

Darden Restaurants dropped 2% after the Olive Garden parent missed first-quarter sales and profit estimates.

The S&P 500 looked set to nearly erase its weekly advance as futures dropped 0.5%. Nasdaq 100 contracts slid 0.9%. The Treasury selloff continued at the longer end, with 30-year yields rising as much as four basis points to 5.44%. The shorter end saw some relief. Brent crude topped $105 a barrel. Expectations for higher-for-longer interest rates put the dollar on course for its longest winning streak since May.

Inflation anxiety is back at the forefront for investors, with concerns over Brent crude trading above $100 a barrel and an overheating US economy piling fresh pressure on bond markets. That has taken the shine off stocks, pulling the Nasdaq 100 down from a record high, Bloomberg reported.

The benchmark 10-year Treasury yield jumped around 15 basis points to 5.11%, its highest level in nearly 19 years, since 2007.

The 2-year Treasury note yield, which is more sensitive to expected changes in Federal Reserve policy, jumped more than 11 basis points to 4.889%, hitting its highest level since May 2024. Meanwhile, the longer-dated 30-year Treasury yield climbed 9 basis points to its highest level since 2007.

Iranian President Masoud Pezeshkian told the UN General Assembly that Tehran would not bow to threats, adding that the Islamic Republic would not give up its right to develop nuclear technology for economic development.

Pezeshkian also said Iran would not allow freedom of navigation through the Strait of Hormuz as long as sanctions and a US blockade remain in effect.

Investors are closely watching the outcome of talks between US President Donald Trump and Chinese President Xi Jinping later in the day at the White House. Discussions are expected to cover a range of issues, including trade, the war in Iran and artificial intelligence. Some analysts remain skeptical about the prospects of major agreements emerging from the meeting, AP reported.

Meanwhile, Treasury Secretary Scott Bessent said the two countries had agreed to extend their trade truce by two months, adding another key development for investors to track as markets assess the broader US-China relationship.

The US stock futures were trading deep in the red in Thursday’s session, indicating another weak start to Wall Street, as investors remained concerned about rising bond yields and sharp swings in crude oil prices.

The tech-heavy Nasdaq futures were down 1%, while those tied to the S&P 500 and Dow Jones Industrial Average were also lower by 0.4% and 0.6%, respectively.