Volkswacht Bodensee - Stocks, oil prices retreat on US debt worries

A weak auction of 20-year US government debt flashed a warning sign that the bond market was worried about the country's finances, days after Moody's lowered its top-tier credit rating for the world's biggest economy.

Big losses Wednesday on Wall Street carried over into Asian and European trading Thursday.

The dollar remained under pressure despite rising against the euro and pound.

The European currencies were hit by weak business activity data out of the eurozone and Britain.

Bitcoin extended its record run higher, reaching an all-time high of almost $112,000.

"The growing mountain of US debt is causing ripples of worry across financial markets," noted Susannah Streeter, head of money and markets at Hargreaves Lansdown.

"As the dollar has weakened, amid concerns about the US fiscal position, bitcoin has flexed even more muscle, as investors appear to be looking for alternatives to the greenback."

Streeter added that investors have "taken on more risk as relief still washes through financial markets that the trade war between China and the US has receded".

Bond yields have spiked across the board as investors demanded more interest for holding government debt.

In the US, 30-year Treasuries hit their highest level since late 2023.

The selling came after the auction of 20-year bonds attracted tepid interest and brought back memories of the sell-off that followed Trump's "Liberation Day" tariff blitz last month.

Trump is hoping to push through a mega-bill pairing tax relief with spending cuts that critics say would decimate health care and push up debt.

"The proposed tax cuts are raising concerns from economists about the US fiscal position and there are signs of anxiety in the bond markets about the country's debt burden," said National Australia Bank's Tapas Strickland.

Oil prices extended losses Thursday as US debt concerns could weigh on crude demand.

The commodity shed 1.7 percent, also after government data showing US crude stockpiles rose last week.

Crude had rallied Wednesday on a CNN report that Israel was planning a strike on Iranian nuclear sites.

- Key figures at around 1035 GMT -

London - FTSE 100: DOWN 0.7 percent at 8,726.95 points

Paris - CAC 40: DOWN 1.0 percent at 7,833.06

Frankfurt - DAX: DOWN 0.9 percent at 23,911.23

Tokyo - Nikkei 225: DOWN 0.8 percent at 36,985.87 (close)

Hong Kong - Hang Seng Index: DOWN 1.2 percent at 23,544.31 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,380.19 (close)

New York - Dow: DOWN 1.9 percent at 41,860.44 (close)

Euro/dollar: DOWN at $1.1298 from $1.1334 on Wednesday

Pound/dollar: DOWN at $1.3396 from $1.3421

Dollar/yen: DOWN at 143.64 yen from 143.66 yen

Euro/pound: DOWN at 84.31 pence from 84.42 pence

West Texas Intermediate: DOWN 1.7 percent at $60.51 per barrel

Brent North Sea Crude: DOWN 1.7 percent at $63.80 per barrel

G.Frei--VB