NEW YORK — West Texas Intermediate crude fell 3.5 percent Thursday, its sharpest single-day decline since June, after Saudi Arabia's energy ministry announced increased production quotas for August. Brent crude also dropped. The kingdom cited stable global demand and a commitment to market stability, adding roughly 500,000 barrels per day to global supply.

The move wrong-footed consensus. JPMorgan energy analysts had projected stable output through the third quarter, and the last comparable Saudi adjustment — in March — produced only a 2.1 percent price decline. This one hit harder.

The bond market did not flinch. The two-year Treasury yield slipped 2 basis points to 4.81 percent; the 10-year fell 3 basis points to 4.25 percent. Institutional holders carrying duration risk did not reprice materially. The long end's stillness delivers a clear verdict: falling oil is not the disinflationary catalyst that would move the Fed toward earlier cuts.

Corporate credit confirmed that read. The iBoxx USD Liquid Investment Grade Index spread held at 105 basis points over Treasuries — no compression, no widening. Real money is priced off broader economic fundamentals, not a commodity swing.

Equities were similarly unmoved at the index level. The Dow Jones Industrial Average rose 0.5 percent to 52,210, the Nasdaq Composite fell 0.2 percent to 24,932 and the S&P 500 closed flat at 7,413. Energy names took the direct hit: ExxonMobil fell 2.8 percent, Chevron dropped 2.5 percent and SLB declined 3.1 percent.

Goldman Sachs analysts said the oil selloff was overdone, pointing to demand from emerging markets. They held their fourth-quarter WTI price target, citing potential for renewed geopolitical tensions.

Federal Reserve Chair Kevin Warsh has said monetary policy turns on a broad array of economic data, not a single commodity move. The next Consumer Price Index report, due Aug. 13, will provide the more relevant inflation signal.

The yield curve remains inverted, with the three-month Treasury bill yielding 5.30 percent against the 10-year at 4.25 percent — a spread that reflects persistent growth concerns no oil price move has erased. Fed funds futures still price the first rate cut in March 2027 at an 89 percent probability. Today's crude drop changed none of that.