Rising oil prices coincide with declines in US stocks and bonds — MarketWatch
In US financial markets, rising oil prices are increasingly accompanied by declines in stocks and long-term Treasury bonds. After the war between the United States and Iran began in late February, this relationship intensified, MarketWatch reports.
Correlation with the stock market
According to Dow Jones Market Data, the 63-day correlation between US WTI crude oil and the S&P 500 index stood at 0.04 on February 27, meaning it was nearly neutral. By the end of March, it had fallen to minus 0.35, and by the end of April, to minus 0.48. A negative correlation means that as oil prices rose, stocks increasingly declined.
Nomura Securities International strategist Charlie McElligott said that oil and energy had become the defining factor in the current global macroeconomic risk regime. Previously, more expensive oil could support stocks because its rise was associated with more resilient demand in the economy. In 2025, the correlation between WTI and the S&P 500 was mostly positive.
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Treasury yields
A similar trend is observed in long-term US Treasury bonds. The 63-day correlation of WTI with the iShares 20+ Year Treasury Bond ETF fell from minus 0.15 on February 27 to minus 0.28 at the end of April, and stood at minus 0.55 on Tuesday morning.
XTB research director Kathleen Brooks noted that Treasury yields are now influenced less by flows into safe-haven assets and more by inflation expectations. According to her, the correlation between bond yields and oil prices reached its highest level in seven years.
According to FactSet, the yield on 10-year US Treasury bonds rose by 2 basis points to 5.040%, the highest intraday level since July 19, 2007. The yield on 30-year securities also increased by 2 basis points, to 5.369%.
