Global equity markets moved lower as a rise in crude oil prices and a sharp increase in US Treasury yields added to concerns over inflation and the outlook for interest rates. The S&P 500 fell 0.3 percent, while the Nasdaq 100 declined 0.1 percent and the Dow Jones Industrial Average dropped 0.5 percent. The Stoxx Europe 600 declined 1.2 percent, while the MSCI World Index was down 0.5 percent.

Brent crude traded near $100 a barrel, while West Texas Intermediate crude rose 1.4 percent to $91.65 a barrel. Higher energy prices have renewed concerns about inflationary pressures and the potential implications for monetary policy, particularly as markets assess how central banks may respond to persistent price pressures.

US bond yields also moved sharply higher. The yield on the 10 year US Treasury rose five basis points to 5.33 percent, reaching its highest level since 2002. The 30 year Treasury yield also advanced five basis points to 5.68 percent, while the two year yield declined one basis point to 4.88 percent. Higher long term yields can increase borrowing costs across the economy and place additional pressure on equity valuations.

The latest manufacturing data provided another source of uncertainty. The Institute for Supply Management manufacturing index fell 0.1 point to 54.5. Despite the decline, the reading remained above the 50 level that separates expansion from contraction. Factory activity has now remained in expansionary territory for nine consecutive months, marking its longest such stretch since 2022.

The Federal Reserve's approach to inflation remained a key focus for investors. Federal Reserve Bank of Minneapolis President Neel Kashkari said the central bank would take the necessary steps to bring inflation back toward its target, while acknowledging that it remains uncertain how high interest rates may ultimately need to rise.

The combination of elevated oil prices, rising bond yields and uncertainty over monetary policy is keeping attention focused on the potential weak links across financial markets. Higher energy costs could add to inflation, while higher yields can tighten financial conditions and affect equity valuations.

Corporate developments also remained concentrated around artificial intelligence and technology infrastructure. Micron Technology provided an upbeat current-quarter outlook, supported by strong demand linked to AI infrastructure, although the company warned that higher compensation costs could weigh on profit margins. Broadcom agreed to lend Anthropic up to $42 billion for chip leasing, according to Reuters, highlighting the growing scale of financial and commercial relationships within the AI ecosystem.

Amazon agreed to purchase 690 megawatts of power from Constellation Energy, supporting expansion at the US nuclear power operator's facilities in Maryland. Accenture reported stronger-than-expected bookings for its fourth quarter as investors continue to assess how effectively technology consulting companies are adapting to rising demand for artificial intelligence services.

Tencent agreed to lease advanced AI chips from Oracle in Southeast Asia in what the Financial Times reported as the Chinese company's largest such deal to date. Meanwhile, Taiwan Semiconductor Manufacturing Company is considering a new campus in Texas that could involve tens of billions of dollars in additional investment as the company expands its US manufacturing footprint.

In currency markets, the Bloomberg Dollar Spot Index gained 0.3 percent. The euro declined 0.4 percent to $1.1289, while the British pound fell 0.3 percent to $1.3228. The Japanese yen weakened 0.4 percent to 158.05 per dollar.

Bitcoin rose 0.2 percent to $83,753.38, while Ether gained 0.3 percent to $2,688.48. Spot gold was little changed.