Oil’s drop lifts stocks and bonds, but trade war fears linger

Oil prices fell sharply on Monday, with Brent crude dropping below $90 a barrel, triggering a solid rise on Wall Street and a strong rally in Treasuries as investors weighed U.S. bond buybacks and an escalating U.S.-Canada trade war. The drop in oil, down 3-4%, lifted stocks with the S&P 500 and Dow each rising 0.3% and the Nasdaq gaining 0.7%, while U.S. yields fell as much as 8 basis points, their biggest decline in two months. Canada slapped retaliatory tariffs on $20 billion of U.S. goods. Treasury Secretary Scott Bessent faced criticism from former colleague Stanley Druckenmiller over increased long bond buybacks, which observers say aim to lower yields. Druckenmiller warned liquidity tools cannot fix solvency issues, with no comment from Bessent or Treasury so far.