US financial markets endured a volatile session as mounting anxiety over the bond market pushed US Treasury yields to their highest level in more than two decades, while oil prices swung erratically even as the Nasdaq and S&P 500 touched record highs.
Wall Street closed lower on Wednesday as oil prices rose and then cooled amid fresh concerns about the risk of supply disruptions in the Middle East.
Stocks fell back after hitting records in the previous session on Tuesday, when US Treasury yields climbed to a 24-year high on investor fears that elevated oil prices would feed into inflation and interest rates.
Oil initially rose during Wednesday's session after warnings that Iran appeared to be stepping up attacks on tankers in the Strait of Hormuz, before closing lower after member states of the International Energy Agency (IEA) said they were ready to release more strategic reserves.
IEA member countries declared they were prepared to release additional oil from reserves if necessary and would prioritise diesel, given tightening supplies of the fuel, the organisation's head said on Wednesday.
The G7, working with the IEA, agreed last Friday to release 100 million barrels of oil and diesel to ease concerns over global energy supply arising from the war between the US and Iran.
The latest IEA announcement helped cool the oil market after prices rose during Wednesday's session, following a report from Britain's UK Maritime Trade Operations.
The maritime agency said on Tuesday that there had been nine attacks on tankers in the Strait of Hormuz this month, equivalent to half the total number of incidents in September across that shipping route and the Gulf combined.
US Secretary of State Marco Rubio, however, repeated Washington's assertion that it is controlling the strait and that oil flows are close to normal levels.
Gulf oil flows recover
Oil exports from the Gulf have recovered significantly in recent days despite a surge in attacks on vessels around the Strait of Hormuz, according to maritime experts and ship trackers.
Gulf oil flows, excluding Iran, have recovered to more than 81 percent of pre-war levels in September, while crude exports from the entire Middle East surpassed pre-war levels during the 14 days of this month, according to maritime analytics firm Kpler.
The recovery, however, is unfolding as tanker attacks mount and shipping firms face higher transport, insurance and security costs.
On Tuesday, 12 crew members aboard a Panama-flagged tanker were wounded in an attack by an unidentified object as it transited the Strait of Hormuz, according to a statement from India's Ministry of External Affairs.
