Trump says the US doesn't need a deal with Iran, oil settles up 2.55% at $88.74, and gold sinks below $3,900 as the 10-year yield closes at 5.10%

Oil started Thursday lower and finished sharply higher, and the reason was a single social-media post. President Donald Trump wrote that the United States no longer needs a deal with Iran, reviving worries that the war will drag on. At the same time, three Federal Reserve officials made the case for more rate increases, and the combination pushed bond yields up and gold down hard.

Oil: down early, up at the settle

U.S. West Texas Intermediate crude for December delivery rose $2.21, or 2.55%, to settle at $88.74 a barrel, according to exchange settlement data compiled by The Edge, matching Yahoo Finance data. Prices had been lower in the morning after an OPEC report showed Middle Eastern crude production recovering to near pre-war levels in October, DTN reported.

Then came Trump's post on Truth Social:

"We don't need a deal with Iran. Those days have long since passed. We've got their money, Hundreds of Billions of Dollars, and we've got their Strait!" - President Donald Trump

DTN said Trump also asked Vice President JD Vance, who had been leading the diplomatic effort, to focus on domestic policy instead. The comments contradicted recent signals from U.S. officials that talks to end the conflict and reopen the Strait of Hormuz were making progress. "The market may have gotten ahead of itself on pricing in a cessation of hostilities," John Kilduff of Again Capital told CNBC.

Energy stocks responded. The S&P 500 energy sector rose 1.5%, its fourth straight gain and the best performance of the 11 sectors, Reuters reported.

Gold: a third straight loss

Gold went the other way. December gold fell $115.20, or 2.88%, to settle at $3,885.30 an ounce, according to dpa-AFX/RTTNews and The Edge's exchange settlement table. Investing.com said it was the metal's third straight daily loss. Silver also dropped more than 3.5%.

The pressure came from interest rates. Higher oil prices revived inflation worries, and gold, which pays no income, tends to lose appeal when Treasury yields rise. Investing.com noted that selling accelerated once the 10-year yield pushed above 5.05% after the New York open.

Yields: the bond market catches up

Treasury cash trading was closed on Wednesday for Veterans Day, so Thursday was the bond market's first chance to react to two days of news. The 10-year yield closed at 5.10% and the 2-year at 4.86%, according to Treasury Department data, up from 4.98% and 4.73% on Tuesday. Barchart said the 10-year touched 5.13% during the session, a three-week high. The 30-year closed at 5.43%.

Three Fed officials, one direction

The Fed's benchmark rate sits at 3.75% to 4% after last month's hold. Thursday's speakers left little doubt about which way they lean.

Cleveland Fed President Beth Hammack, who dissented in favor of a quarter-point increase last month, said the latest data show "inflation is moving in the wrong direction," Bloomberg News reported. She has argued for smaller but more frequent increases.

Chicago Fed President Austan Goolsbee told Yahoo Finance that "we're way above the target, and this wasn't a one-off month," referring to October's consumer price report, Reuters reported.

"My bias is that further tightening will be needed." - Mary Daly, president of the San Francisco Fed, at Stanford

Daly also said rising bond yields "are most welcome" because tighter financial conditions give the Fed "a little more time to make really calibrated decisions," according to Reuters.

Markets are fully pricing at least a quarter-point increase at the Dec. 8-9 meeting, with about a 15% chance of a half point, according to CME's FedWatch tool as cited by Reuters. On the prediction market Kalshi, traders put the odds of a quarter-point move at 87%.

The data

Weekly initial jobless claims rose 9,000 to 200,000, slightly above the 194,000 economists expected, and existing home sales fell 5.5% in October to 3.75 million, a 16-year low, Barchart reported.

What carries into Friday

New York Fed President John Williams was scheduled to speak Thursday evening, Scotiabank said. Oil traders will watch for any reply from Tehran, and bond investors for whether the 10-year can hold above 5%. For stocks, higher yields are the backdrop to a week already shaken by Nvidia's leadership change.