Stocks face bond rout as 10-year Treasury yield rises again

The bond rout pushed the U.S. 10-year yield to 4.765%, pressuring stocks as oil climbed. The move raises borrowing costs for governments.

The yield was up 0.9 basis point and was on pace for its highest level since January 2025, market data showed. The 30-year Treasury yield stood at 5.245%, up 0.1 basis point from the prior quote, keeping long-term financing costs elevated.

Ten-year pressure reaches Tokyo

Japan’s 10-year government bond yield was quoted at 2.996%, up 4.9 basis points, and touched 3%, the highest level cited since 1996. The move followed comments from Scott Bessent that pointed to possible Bank of Japan rate increases.

Yields on German and French government bonds also rose to multiyear highs, extending the pressure beyond the U.S. and Japan. Bond prices move inversely to yields, so the increase signals lower prices for existing government debt.

Investors were weighing several pressures at once: Middle East tensions, larger fiscal deficits worldwide, heavier corporate borrowing and Federal Reserve Chairman Kevin Warsh’s reluctance to provide forward guidance. Each factor affects the supply of bonds, the expected path for inflation or the compensation investors demand to hold longer-dated debt.

Nasdaq leads early losses

U.S. equities opened lower as higher yields competed with stocks for investor capital. The Nasdaq was quoted at 26,125.93, down 244.96 points, or 0.93%, the largest decline among the three major U.S. benchmarks in the cited market data.

The S&P 500 stood at 7,644.25, down 41.89 points, or 0.55%, while the Dow Jones Industrial Average was at 52,989.23, down 196.67 points, or 0.37%. Higher government yields can pressure equity valuations by raising discount rates and giving investors a higher-risk-free return alternative.

Asian equities had already weakened earlier in the session. Shein’s stock-market debut was muted, a signal that higher rates and softer risk appetite can make public listings more difficult for consumer-facing companies.

Brent links bonds to inflation

Brent crude was quoted at $92.56 a barrel, up $2.07, or 2.29%, after U.S. and Iranian forces clashed over the weekend for the first time in weeks. The oil move matters for bonds because energy costs feed into inflation expectations and household purchasing power.

If energy prices stay high, central banks have less room to ease policy and may face pressure to keep rates higher for longer. If oil retreats, the inflation channel would weaken, though fiscal deficits and corporate supply could still keep term premiums elevated.

Scenarios turn on oil

If Brent holds near $92.56 and the Middle East standoff continues, the global macro effect would be tighter financial conditions through higher inflation expectations and dearer sovereign borrowing. For Shein, that path would make its early trading a harder test of investor demand, while the broader retail and IPO market would face higher hurdles for new issuance.

If energy prices ease and rate guidance becomes clearer, the global pressure from the bond market could moderate through lower inflation risk and improved policy visibility. Shein would then be judged more on its own growth and margins, while governments, banks and corporate borrowers would watch whether long-dated yields retreat from multiyear levels or remain anchored by fiscal supply.