U.S. Treasury Yields Hit 24-Year Peaks Amid Global Bond Sell-off

U.S. Treasury yields climbed to multi-decade highs on Wednesday, with the 10-year rate touching 5.35% and the 30-year reaching 5.73%, the strongest levels since 2002. The surge was part of a broader global bond sell-off that also saw French and Italian benchmark yields jump sharply, and the U.K. 30-year gilt hit its highest point since 1998.

Higher yields pushed equity markets lower. Europe’s Stoxx 600 fell about 1%, while France and Germany’s main indexes each slipped more than 1% and Italy’s FTSE MIB dropped nearly 2.5%. In the United States, the S&P 500 was down 0.6% and the Nasdaq Composite fell 0.8% in early trading, a reversal from record-setting closes the day before.

Oil prices rose alongside the bond rally, with Brent crude gaining roughly 1% to trade above $102 a barrel, adding further upward pressure on yields. The Treasury Department scheduled a $39 billion sale of 10-year notes at 2 p.m. ET, drawing close market attention.

International Monetary Fund chief Kristalina Georgieva warned that governments must act quickly to manage soaring debt levels, noting that the recent yield increase marks a shift after years of low rates. She said, ">Policymakers had a relatively easy ride over the last 17 years, as for all that time interest rates were stuck below GDP growth rates. Higher interest rates now put an end to that."

Analysts linked the bond market stress to growing financing by AI-related firms. Huw van Steenis of Apollo noted that European-currency bonds issued by hyperscale tech companies totalled $48 billion this year, more than triple the amount projected for 2025. Yardeni Research president Ed Yardeni warned that France could be approaching a debt crisis, citing the sharp rise in its 10-year yield.

The confluence of rising bond yields, equity declines, and higher oil prices underscores heightened market volatility as investors assess the impact of higher borrowing costs on corporate profits and sovereign debt sustainability.