U.S. Treasury yields hit multiyear highs on Thursday, with the 10-year yield rising to its highest level since 2007 and the 30-year yield reaching its highest since 2004, amid increasing expectations the Federal Reserve will raise interest rates. The uncertain outlook for peace in the Middle East pushed bond yields higher and weighed on stocks, as investors weighed dissonant reports on attacks and negotiations.

Fed officials, including Paulson and Williams, predicted more rate increases ahead, with Williams calling another hike 'reasonable' in 2026. Oil prices jumped on renewed Middle East escalation concerns after Saudi Arabia said it intercepted six ballistic missiles, while U.S.-Iran talks showed little progress.

U.S. jobless claims fell to 197,000, below economists' expectations. War throttled Black Sea grain exports, threatening food supplies as wheat futures rose. New York State sued Polymarket in an escalating crackdown on prediction markets, while Canada retail sales fell 0.7% in July.

European central banks diverged on rates, with Norway raising its key rate to 4.5%. German business sentiment climbed to its highest level in three years, and the BOE deputy governor said rate rises were increasingly likely if energy prices stayed high. Ukraine's economy was hampered by Black Sea and energy disruptions, per the EBRD.