Oil hovers around $100 as US bonds suffer their worst quarter since 1994

Oil prices bounced back above $100 a barrel on Thursday as a US-Iran deal remained elusive, while European stocks fell and US government bonds came off their worst quarter since 1994, with the 10-year Treasury yield at its highest since 2007.

Oil prices slipped in Asian trading on Thursday but bounced back in the European morning as investors weighed a recovery in Gulf crude shipments against the lack of a deal to end the war with Iran.

At the time of writing, Brent crude, the international benchmark, was up 2.6% at just above $100 a barrel, while the US benchmark West Texas Intermediate was also up 2.6% at roughly $92.80.

Crude exports from the Gulf have climbed back close to pre-war levels, while Saudi Arabia has partly restored its East-West pipeline, which bypasses the Strait of Hormuz.

Iran said on Wednesday it had received a US response to its offer to reopen the strait if Washington lifts its blockade of Iranian ports, releases frozen assets and eases current oil sanctions.

"We will make every effort to bring the agreement to fruition," Iranian President Masoud Pezeshkian stated.

However, US President Donald Trump struck a blunter tone.

"We blow them up or make a deal," Trump told reporters in the Oval Office late on Wednesday, adding that the war would end "very soon" one way or another.

OPEC+ is expected to keep November output targets unchanged when it meets on Sunday, according to delegates cited by Bloomberg.

This comes as shipping risks remain elevated, three vessels were struck in the strait on Tuesday, according to British maritime authorities.

European markets fall, chip stocks lift Asia and US bonds teeter

In Europe, stocks fell at the open on Thursday.

The Euro Stoxx 50 was roughly 1% lower in early trading, while the broader pan-European Stoxx 600 dropped 1.5%.

The UK's FTSE 100, France's CAC 40, Germany's DAX, Italy's FTSE MIB, Spain's IBEX 35 and the Netherlands' AEX all traded between 1% and 2% lower.

Investors are weighing faster-than-expected September inflation in Germany, France and Italy, driven by the energy shock.

Over in Asia, Japan's Nikkei 225 jumped almost 2% as chipmakers rallied after US memory maker Micron forecast stronger-than-expected results.

South Korea's Kospi also rose over 2% after September exports jumped 83.5% from a year earlier to a monthly record, driven by chip sales. Markets in mainland China and Hong Kong were closed for National Day holidays.

On Wall Street, the S&P 500 fell 0.3%, the Dow Jones Industrial Average lost 0.9% and the Nasdaq composite edged up 0.2% on Wednesday as the S&P 500 ended September with a monthly loss.

Softer-than-expected US inflation data initially cut the odds of an October rate hike to around 38% from about 50%, according to CME's FedWatch tool, but stronger growth figures later weighed on stocks.

The 10-year US Treasury yield touched 5.3%, its highest since 2007, capping its biggest quarterly rise since 1994. At the time of writing, US futures were trading flat.

Investors will now turn to Friday's US jobs report for September.