WSJ What’s News - Bond Yields Around the World Soar

Episode Date: September 1, 2026

P.M. Edition for Sept. 1. An unruly bond market is sending borrowing costs to their highest levels in decades. Financial markets reporter Jack Pitcher discusses why there’s a global selloff in bonds. One reason? The escalation in fighting in the Middle East, as the U.S. launches a new wave of strikes against Iran. Plus, Hollywood reporter Ben Fritz goes into how the industry is skeptical of Paramount head David Ellison’s promise to release 30 movies in theaters every year after merging with Warner Bros. Discovery. And the House passes a measure funding the government past the midterms. Pierre Bienaimé hosts. Sign up for the WSJ's free What's News newsletter. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Fighting heats up between the U.S. and Iran. That's pushing up the price of oil and sending bond yields soaring around the world. There's a global index of government bonds that today touched the highest yield level since 2008. And banks once lobbied against stable coins. Now many of them are teaming up to launch their own. It's Tuesday, September 1st. I'm Pierre Bienname for the Wall Street Journal, sitting in for Alex Oslo. This is the PM edition.

of what's news, the top headlines and business stories that moved the world today. Let's begin with one of big tech's big rivalries. OpenAI is hitting back at Apple, the company that has accused OpenAI of stealing trade secrets. In illegal filing late last night, OpenAI called Apple's lawsuit baseless. The Chad GPT maker says Apple's trying to hurt OpenAI's ability to recruit new employees. OpenAI wants to develop AI-driven devices that compete with the iPhone, and OpenAI says Apple's trying to block that. Apple's suit was filed in July.

It accuses two OpenAI employees who once worked for Apple of taking Apple's confidential information. OpenAI says Apple's suit largely boils down to it having poor off-boarding procedures. Apple didn't respond to requests for further comment. And in finance, major U.S. banks are joining other firms around the world to launch a business they once disregarded. That business is stable coins. These are digital tokens pegged to the U.S. dollar or other currencies, and they're used for

transactions across borders. Bank of America, Citigroup, and Goldman Sachs are among the firms teaming up to launch a stable coin in the first half of next year. Gina Heab covers banks and finance for the Wall Street Journal, and she joins me now. Gina, could you tell us more about stable coins, like what they really are and who uses them and for what? Right now they're mainly used to trade in. in and out of cryptocurrencies.

The thinking is that they could grow in popularity and be used to make cross-border transactions faster, more efficient, cheaper. But right now, they're mainly used in the crypto world. In this case, it's a currency that will belong to a group of companies, most of them banks. Exactly, yes. So we have all those big American banks outside of the U.S. We have Gosha Bank. In Europe, we have Santander, Deutsche Bank.

And you've been covering this for a while, this evolution, from banks rejecting stable coins, even lobbying against them, to now getting in on it themselves. What happened there? So banks came out with this tokenized deposit solution. They are essentially just a digital asset representation of traditional funds. The thinking was that that could be enough to combat some of the rising competition in the crypto world.

As other firms have gotten into stablecoin, not just crypto firms, but, you know, like BlackRock, DoorDash have gotten in on this market. Banks have kind of said maybe we need to be a little bit more defensive here. And President Trump's family is also one of the groups launching their own stable coin. That is right, yes. Are there any risks here for banks in launching something like this? You know, it's largely a defensive strategy without knowing that stable coins will take off. And in that case, it's like you've invested money in this and it doesn't really go anywhere.

and then whatever plays out with digital asset regulation remains uncertain. Gina Heab covers banks and finance for the Wall Street Journal. Gina, thanks so much. Thank you for having me. Germany has accused Russia of sending explosive drones to its Leipzig airport last month and it's pledging to retaliate against Moscow. It's a rare public attribution of blame in the widening campaign of sabotage across NATO territory, like drone incursions, cyber attacks, and arson.

In a press conference today, German Interior Minister, Alexander Dobrint said that Germany is a, quote, daily target of hybrid warfare. Germany said it would close the last Russian consulate in the country, summon the Russian ambassador, and tightened restrictions on Russians entering Germany. The Kremlin didn't respond to repeated requests for comment. And in the Middle East, the U.S. said it, was carrying out a new wave of strikes on Iranian targets today. The military says these strikes come after Iran tried attacking commercial ships and U.S. service members in the region. Fighting between

the countries has picked back up this week. The U.S. response comes after weeks of Iranian attacks on shipping that have tested the military's restraint. In a post on social media today, President Trump threatened more strikes if Tehran responded. And news of this fighting drove up the price of oil, with Brent crude up 4.6%. The move also pressured bonds, where a global route is raising borrowing costs for governments around the world. Yields on German and UK bonds hit their highest levels in 15 years or more. Japan's 10-year government bond traded at the highest point since 1996, and in the U.S., the 10-year treasury yield was hovering at levels rarely seen since the financial crisis.

Markets reporter Jack Pitcher says there are a few drivers behind the sell-off. There's a global index of government bonds that today touched the highest yield level since 2008. So we really are at the highest borrowing costs for governments and then everything else, which gets benchmark to that, that we've had in almost 20 years. Bond yields tend to move in line with inflation expectations. So first and foremost, we have that factor. We're also seeing renewed fighting in the Middle East today that's got oil prices going back up and that pressure is inflation. Aside from that, there's concern about fiscal deficits in the U.S. and other regions of the world and whether governments are going to be able to get a handle on that.

Jack says uncertainty over the Federal Reserve's next move under Chairman Kevin Warsh is also weighing on bonds. Warsh has said he's going to take more of a stance of letting the bond market figure out what rates should be based on the data points coming in. And as a result of that, there's less certainty over what the next move will be, whether he's going to hike rates at the September Fed meeting. and that's getting priced into the risk premium here. And as for stocks today, while equity markets have mostly shrugged off the bond sell-off, they fell today. Some investors worry that if bond yields keep climbing,

that could mean a big sell-off in AI-driven stocks. Today, the NASDAQ led the losses in the major indexes. It dropped 1%. Coming up, can one company produce 30 movies in a year? Paramount says it's possible, but Hollywood doesn't buy it. We get into why after the break. A few updates from Washington today. The House of Representatives has passed a spending measure that funds the government past the midterms.

Both Democrats and Republicans are eager to avoid a shutdown, and both sides would like to leave Washington as soon as possible to campaign ahead of the election. The resolution, which extends current funding levels through December 11th, passed 370 votes to 48. It now goes to President Trump's desk. And we're exclusively reporting that Republicans planned to raise millions of dollars during next week's GOP midterm convention in Dallas, including by asking donors to pay more than $88,000 for a photo with President Trump. The Wall Street Journal also saw an invitation to a roundtable with the president, and it costs $250,000 per person attending. Midterm conventions are rare, but Republicans are betting the event will boost their prospects heading into November's election.

Both Trump and Vice President J.D. Vance are scheduled to deliver keynote addresses at the two-day convention. An R&C spokesman didn't immediately respond to a request for comment. And finally, Paramount's $81 billion deal for Warner Brothers Discovery is still up in the air. It's fighting an antitrust challenge from a group of U.S. states. But in an effort to push the deal over the line, Paramount CEO David Ellison has made a promise. He says the combined company would put at least 30 movies in theaters every year. And Paramount has written agreements with theater operators to that effect. Paramount on its own has quite a few franchises.

Oh, I'm not. No, dino's too big. No, pop's too small. Case have the case. Unsold. No solved. No sold. Merry Christmas.

Bombard! Like what you just heard, scream, Paw Patrol, quite different IPs. The last time an entertainment company released 30 movies, nationwide in theaters in one year was in 2007. Ben Fritz covers Hollywood for the Wall Street Journal, and he says a lot of folks in the movie business don't think 30 movies a year is doable today. So what David Ellison is promising goes against the economic incentives of the business. The kind of movies that work now are most often bigger budget blockbusters that can appeal to people internationally, like your Spider-Man and your Odyssey. You can't make 30 odyses in a year.

So some of your movies are going to have to be lower budget, genre films, original films. And those are actually the riskiest kind of movies to make because sometimes they feel like a streaming movie. Why even bother going to a theater for it? That's the reason why most studios have cut back so much. Ben says the pledge has been useful in shoring up support for the deal, however. By promising 30 movies, David Ellison has got AMC. Regal and Cynemark to support this merger. It's important to him to have the theater. community out on his side, and he's managed to achieve that.

And that's what's news for this Tuesday afternoon. Today's show was produced by Danny Lewis and Alexis Moore with supervising producer Talia R. Bell. I'm Pierre Bien-Ameh for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.