NEW YORK, Sept 6 — World stock indexes eased and benchmark 10-year Treasury yields rose to their highest in more than a week yesterday as oil prices jumped and investors weighed prospects for further US interest rate hikes.

Orders for US factory goods declined less than expected in July, according to data.

At the same time, economic data in China and Europe fuelled some worries about slowing global growth.

A private-sector survey yesterday showed China’s services activity expanded at the slowest pace in eight months in August as weak demand continued to dog the world’s second-largest economy.

Data from the euro area and Britain also showed a decline in business activity last month, with the dominant services industry in both regions falling into contraction.

"Interest rates are continuing to rise,” and investors are focused on the Federal Reserve’s rate path, said Paul Nolte, market strategist, Murphy & Sylvest Wealth Management in Elmhurst, Illinois.

Investors were also digesting comments yesterday from Fed Governor Christopher Waller, who said the latest round of economic data was giving the US central bank space to see if it needs to raise rates again, while noting that he currently sees nothing that would force a move toward boosting the cost of short-term borrowing again.

The Fed has been raising rates to curb inflation.

The Dow led declines among the three major stock indexes on Wall Street, even as higher oil lifted shares of some energy companies.

Oil prices rose to their highest since November after Saudi Arabia and Russia extended their voluntary supply cuts to the end of the year.

The Dow Jones Industrial Average fell 195.74 points, or 0.56 per cent, to 34,641.97, the S&P 500 lost 18.94 points, or 0.42 per cent, to 4,496.83 and the Nasdaq Composite dropped 10.86 points, or 0.08 per cent, to 14,020.95.

The pan-European STOXX 600 index lost 0.23 per cent and MSCI’s gauge of stocks across the globe shed 0.60 per cent.

In Treasuries, the yield on the benchmark US 10-year Treasury note rose 9 basis points to 4.26 per cent after reaching 4.268 per cent, its highest level since August 25.

The US dollar rose to a near six-month high against a basket of currencies as the Chinese economic data fuelled worries over global growth and pushed investors into the safe-haven US currency.

The Australian dollar fell more than 1 per cent and hit a fresh 10-month low after Australia’s central bank earlier yesterday kept interest rates steady for a third month.

Brent crude futures rose by US$1.04 (RM6.50), or 1.2 per cent, to settle at US$90.04 a barrel, while US crude futures gained US$1.14, or 1.3 per cent, to settle at US$86.69 a barrel.

Spot gold dropped 0.7 per cent to US$1,925.48 an ounce. US gold futures fell 0.74 per cent to US$1,925.50 an ounce. — Reuters