Oil breaks below $100 as Wall Street shrugs off a 5% Treasury yield and a hike-happy week

• US: the S&P 500 stands at 7,650.50, up 0.17%, the Nasdaq at 26,522.55, up 0.39%, and the Dow at 51,682.64, down 0.18%. Over five sessions the S&P is up 0.4% and the Dow down 1.41%. The Russell 2000 closed down 0.5%.
• Europe closed with its worst day of the week: the FTSE 100 ended down 1.45% at 10,659.13, the DAX down 1.6% at 25,304.06, the CAC 40 down 1.49% at 8,065.02 and the Euro Stoxx 50 down 1.37%.
• Asia finished strong: the Nikkei closed up 1.71% at 65,018.95 after the Bank of Japan hiked, the Kospi up 2.62%, Taiwan up 2.9% and the Hang Seng up 0.15%.

The day's biggest move was in crude, not equities. Brent is trading at $98.54, down 5.99%, and WTI at $95.33, down 6.46%, the third straight session of losses. The drivers the majors cite are Saudi Arabia's plan to restore roughly half of the East-West pipeline's capacity within days after Houthi strikes damaged three pumping stations, and a Chinese request that Iran rein in Houthi attacks on Saudi infrastructure. Both cut the tail risk of a prolonged export outage even as Aramco has told European customers to expect no crude next month. The sharp afternoon leg lower has no single confirmed trigger beyond those two stories; that Brent still sits 62% higher on the year says how far the market remains from normal.

Cheaper oil is why US stocks could rise at all against a 10-year Treasury yield at 4.998%, up 5.1 basis points, near the level CNBC described as its highest since 2007. This is the week the Fed raised rates for the first time in three years to 3.75%-4%, with Kansas City Fed President Jeff Schmid saying the bank 'has work to do on inflation'. Higher long yields raise the discount rate on future profits, which hurts growth stocks most, so the Nasdaq outperforming is a sign investors weighted the oil relief above the rates pain.

Europe had no such offset. Volkswagen slashed its outlook with about €10bn of one-off charges, dragging autos 3.4% lower, and telecoms fell 3.3% as Airtel Africa slumped on reports its mobile-money unit may shrink its London IPO and Orange fell on a Morgan Stanley downgrade. The ECB's Kazaks added that September's hike is 'unlikely to be the last'.

Equity fear is low and falling: the VIX closed at 14.81, down 4.08%, and is 13.39% lower over five days. The bond market disagrees, with the MOVE index up 5.79% to 80.635 and 13.16% higher on the month. That split is the tell. The US tape was narrow: technology rose 0.82% and industrials 0.44%, while utilities and materials each fell 1.42% and communication services 1.37%, and small caps lagged. Europe was broad-based selling, with 2,899 decliners against 1,699 advancers across PrimerIQ's listed universe. Gold rose 0.47% to $4,420.40 and the dollar index was flat at 100.201, so no haven bid to speak of; bitcoin's 6.21% rise to $81,145 reads as risk appetite finding an outlet away from rate-sensitive equities.

Today's US industrial production rose 0.3% in August, in line with expectations, with capacity utilisation at 76.4%. Overnight the Bank of Japan raised its policy rate 25 basis points to 1.25%, the highest since 1995, on a 7-2 vote; the two dissents pushed the yen weaker rather than stronger, with USD/JPY at 156.858, up 0.54%. In Europe, German producer prices rose 4.6% year on year against 4.1% expected, and UK retail sales grew 2.4% year on year versus 1.9% expected.

That sits on top of Wednesday's Fed hike to 3.75%-4% and yesterday's Bank of England hold at 3.75% on a 6-3 vote, with three members wanting 4% and Governor Bailey warning that the longer energy volatility persists 'the more likely it is we will need to raise'. UK inflation was 3.1% in August. Nothing further is scheduled for the US calendar today after the close.

Nothing of consequence reported today and no after-hours releases have landed. Yesterday's session movers were deal- and rating-driven rather than results-driven: Schrödinger jumped 26.37% on its Tectora drug-programme deal, while AutoNation fell 10.49% and Sonic Automotive 9.27% as the car-retail group sold off.