Hormuz talks and a China truce pull stocks off the lows at 5.12% yields

The 10-year Treasury yield climbed to 5.12% on Thursday, its highest level since July 2007 and a third straight session of new multi-year highs, but US stocks pared an early slide as two pieces of news offered relief. Reuters reported that US and Iranian negotiators meeting in New York are weighing a phased deal under which Iran would reopen the Strait of Hormuz in exchange for the US lifting its economic blockade on Tehran. Separately, Treasury Secretary Scott Bessent said the US and China had agreed to extend their "Busan Agreement" trade truce by two months, to January 10, as Xi Jinping's state visit and the Trump-Xi summit got underway in Washington. The relief proved partial: Iranian President Masoud Pezeshkian pushed back hours later, saying Tehran was open to resuming talks but would not respond to threats and would keep restricting freedom of navigation through the strait while US sanctions and the blockade remain in place.

Markets

The S&P 500 and Nasdaq Composite both closed little changed, while the Dow Jones Industrial Average fell 84 points (0.2%) to roughly 51,480. Energy names were a bright spot as oil pushed higher on the day; Costco and Darden Restaurants both reported earnings after the close.

In Europe, the FTSE 100 slipped 0.03% to 10,705, the DAX fell 0.59% to 25,427, the CAC 40 dropped 0.39% to 8,123 and the Stoxx Europe 600 declined 0.44% to 639.93. Allianz was the single largest drag on the Stoxx 600, down about 4%, with insurers and autos the worst-performing sectors — a pattern that has tracked the move higher in yields all week. Better-than-expected regional PMI data was outweighed by oil above $100 and the fresh leg up in bond yields.

Commodities

Brent crude rose about 2% to roughly $105 a barrel and WTI gained about 2% to near $94, both still carrying a Strait of Hormuz risk premium even as reopening talks were reported. Gold slipped to about $4,251 an ounce (Comex settled near $4,293), a two-week low, on dollar strength and hawkish Fed guidance.

Crypto

Bitcoin traded at $84,488 as of 18:56 UTC, roughly flat versus the prior UTC close of $84,398 (+0.1%), after sliding intraday to $82,875 (-1.8% from that close) during European hours as October Fed rate-hike odds firmed to roughly 75%, then recovering through the US afternoon alongside stocks on the Hormuz and trade-truce headlines. Ether traded at $2,694 (+0.3% versus a prior close of $2,684.71), having dipped as low as $2,600 intraday. Alt coins outperformed both: SOL at $117.53 (+2.2%), BNB at $781.92 (+1.9%), XRP at $1.5388 (+2.5%) and DOGE at $0.09679 (+4.4%), each measured against its prior UTC close. There was no concrete crypto-regulation news in this window.

The 2-year Treasury yield rose to about 4.87%, and CME FedWatch-implied odds of an October hike stood around 70-75%, up from roughly 55% a day earlier, following Wednesday's hot PMI print and hawkish Fed commentary — extending the yield selloff that took the 10-year from 5.06% on Wednesday to 5.12% on Thursday.

What it means for crypto trading

Yields at their highest since 2007 remain the dominant cross-asset risk factor and crypto's biggest overhang — they are what drove bitcoin's intraday slide to $82,875. But two genuine tail risks eased today: a real Hormuz deal would remove the oil-driven inflation impulse that has been feeding hike odds, and the US-China truce extension to January 10 takes a trade-war flare-up off the table as a near-term catalyst. Pezeshkian's pushback within hours of the Reuters report is the reason to treat the Hormuz relief as provisional rather than settled — a reversal there would hit both oil and the "hike odds ease" thesis at once.

Sources: