U.S. bond yields rise, U.S. stocks plunge significantly, Bitcoin once again remains unaffected.

U.S. bond yields rose again as tensions in the Middle East escalated, causing the three major U.S. indices to plummet significantly yesterday. The S&P 500 fell by 1.34%, with tech stocks taking the biggest hit at 1.62% due to the U.S. plans to tighten restrictions on the sale of artificial intelligence (AI) chips to China. Bitcoin and Ethereum, on the other hand, remained stable near the flatline.

The yield on the 10-year U.S. Treasury note has risen above 4.9%, the first time since 2007, indicating an increase in the cost of borrowing for both corporate and personal loans. The average rate for a 30-year fixed-rate mortgage has reached 8%, the highest level since the mid-2000s.

Elon Musk, CEO of Tesla, expressed concerns about the recent high-interest rate environment during yesterday's earnings call,

"What people buying a car care about is the monthly payment. If rates are high or going higher, that makes a car more expensive."

The conflict in Gaza continues, with a hospital in Gaza City being bombed, resulting in at least 500 fatalities. While Israel denies responsibility and blames Hamas, the inhumane attack has drawn condemnation from multiple countries. Although U.S. President Biden visited Israel as planned yesterday, the scheduled quadripartite summit with leaders from Jordan, Egypt, and Palestine was canceled due to the incident.

Following the hospital bombing, Iran called for a comprehensive oil embargo against Israel and urged Islamic countries to expel Israeli ambassadors. WTI crude oil futures approached $90 yesterday as investors grew increasingly concerned that the conflict could escalate and involve other oil-exporting countries, keeping oil prices elevated.

Federal Reserve officials will enter a blackout period next week, while Chairman Powell is set to speak at the New York Economic Club today, with markets looking for clues on the central bank's next steps.