Stocks rise and oil drops as Iran offers a Hormuz deal, but long Treasurys fall again

Long Treasurys fell for a fourth straight session as the 30-year yield rose 2 basis points. Bond prices fall when yields rise, so BTLT, the fund that holds Treasurys maturing in more than 20 years, fell 0.1% and traded more shares than on any of the prior 20 sessions. It is down 2.4% for the week.

The 10-year yield traded above 5.2% during the session, an intraday high not seen since mid-2007, and closed at 5.17%, 1 basis point under Thursday's 5.18%. BIEF, the fund that holds Treasurys maturing in seven to ten years, rose 0.3%.

Abbas Araghchi, Iran's foreign minister, told reporters at the United Nations that Tehran would reopen the Strait of Hormuz and resume nuclear talks within seven days if the United States lifts its naval blockade of Iranian ports, waives sanctions on Iranian oil sales, and observes a ceasefire that includes Lebanon. "The seven-day timeline will start as soon as the United States accepts this plan," he said. A White House official said the administration was having positive and constructive discussions through mediators. At 5 p.m. Eastern, WTI crude was at $92.41, down 2.3% from Thursday's settle. BUSO, a fund that holds near-term futures on that oil, closed the 4 p.m. session down 3.1%. AXLE, the fund that holds the S&P 500's energy companies, fell 0.9%.

The 10-year yield is still up 16 basis points from 5.01% on September 18. On September 16 the Federal Reserve raised its benchmark interest rate by 25 basis points, to a range of 3.75% to 4%, its first increase since 2023. Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, said Thursday that the week's rise in Treasury yields had likely been driven by rising expectations of Federal Reserve rate increases, higher growth expectations, higher oil prices and fiscal concerns, among other factors. The same day, the Treasury bought back $4.078 billion of 20- to 30-year bonds, under a $6 billion maximum. Friday's University of Michigan survey put its index at 48.1, down from 51.7 in August. Joanne Hsu, the survey's director, said that was the lowest reading in four months. Year-ahead inflation expectations rose to 4.6% from 4.0%, the highest since June.

ADIA, the fund that tracks the Dow industrials, rose 0.9%, and more than half of that gain came from Microsoft, Caterpillar and Goldman Sachs. The fund was down for the week through Thursday, and Friday left it up 0.3%. ASPY, the fund that tracks the S&P 500, rose 0.5% and is up 1.3% for the week, its first up week in three. Besides energy, the only S&P 500 sector funds that fell were communications and real estate.

AXLC, the fund that tracks the S&P 500's communications companies, fell 0.9%. Meta, 23% of that fund, fell 3.3% and accounted for most of the drop. AXLRE, the fund that tracks the S&P 500's real estate companies, fell 0.2%.

Washington has not accepted the seven-day offer. A U.S. official said the United States was "in a very strong position with control of the Strait of Hormuz, so we are not in a rush." The longest Treasury yields are still at their highest since 2004.