Rising energy prices and bond yields are pushing the Ibex 35 further from 20,000 points. The Spanish index is struggling to hold the 19,600 area as investors reassess the path for interest rates. A temporary easing of the US-China trade dispute has not offset market pressure, with investors anticipating tighter monetary policy.
The immediate risk is crude oil, with prices above 105 dollars a barrel. Iran is threatening to widen the conflict, and hopes of a quick reopening of the Strait of Hormuz are fading. That combination makes a prolonged energy shock more likely and raises the risk that higher costs will feed inflation across the economy.
Median euro-area inflation expectations have risen to 3.0% over the next year and 2.5% over five years, information from the ECB survey cited by BNP Paribas Economic Research. The figures reinforce the view that markets do not expect a rapid return to easier monetary policy.
Money markets already reflect three more Federal Reserve rate moves in the coming months. Higher rates make shares less attractive than safer fixed-income assets and raise borrowing costs for companies and governments.
The bond sell-off in the previous session is still setting the direction for shares. Investors want more compensation for holding debt as inflation persists. Public financing needs are heavy, and companies are taking on more debt for projects in areas including artificial intelligence. The European Central Bank's Economic Bulletin also recorded a rise in 10-year US Treasury yields to 4.9% and 10-year gilt yields to 5.3%. Pressure on Spanish equities is part of a wider global rise in benchmark rates.
The effect is clearest in the Ibex 35's cyclical companies and in businesses that need large amounts of capital or carry large debt.
Solaria is one of the session's sharpest fallers. Reuters reported that its first-half net profit rose to €124.9 million, up 52% year on year, while EBITDA increased 50% to €210.1 million. The company invested €275.8 million during the first half of 2026 and reduced net debt to EBITDA to 3.9x from 5.4x at the end of 2025. The improvement in use is impressive, but its investment programme remains large and leaves the company exposed to financing costs. Its results show strong growth in EBITDA and profit alongside improved use, while its annual targets have come into clearer view.
Much of that progress, though, comes from selling infrastructure linked to data centres, not from recurring power generation alone. Solaria's planned operating capacity for the end of 2026 is still below the original target. The market wants recurring income and stronger cash generation, with reliable execution to back them. Growth in absolute terms is no longer enough. That concern echoes an earlier IPO warning about the sensitivity of Spain's data-centre expansion to regulation and financing conditions.
Repsol is on the other side of the session. The energy group is benefiting from higher crude prices and strong industrial and refining operations. The contrast reflects the market's current logic: energy exposure is helping integrated producers, while expensive debt weighs on renewable developers that require heavy investment.
Wall Street is also trading slightly lower. The latest decline has erased the S&P 500's gains for the month and leaves investors watching the final results season of the year. Solid corporate earnings could help the equity market absorb a moderately tighter monetary cycle, but that cushion is shrinking as yields rise.
Other signals add to the picture. Oracle is taking steps to protect itself from the high cost of building a major data centre in New Mexico. The project already faces opposition and regulatory difficulties. In the United States, jobless claims fell to their lowest level since July and one of their lowest readings since 1969. Layoffs remain infrequent, and the labour market remains resilient.
The dollar's recent strength is cooling demand for gold. The metal is still holding near 4,300 dollars an ounce despite pressure from the stronger currency and higher bond returns, with rising rates adding to the strain.
Morningstar has also pointed to multi-year highs in French and Italian government bond yields, citing high oil prices and the resulting inflation pressure among the factors behind the move. For Spain's benchmark index, rising oil prices and bond yields, alongside rate expectations, are now weighing on valuations.
Repsol can benefit from the energy shock, while Solaria shows the cost of financing and the need for dependable cash generation. Until these pressures ease, a recovery to 20,000 points will remain fragile. The market is rewarding execution over promises of expansion.
