• U.S. stocks fell as 10-year Treasury yields hit their highest since February 2025, driven by rising oil prices and inflation concerns.
  • Oil prices climbed above $105 per barrel (WTI) amid Middle East tensions, amplifying stagflation fears.
  • Investors await major events this week, including Nvidia (NVDA) earnings and the expected filing of SpaceX's IPO prospectus.

The global bond selloff deepened this week, with the benchmark 10-year U.S. Treasury yield rising above 4.5%—levels not seen since early 2025—as stubborn inflation expectations and higher energy costs rattled markets. The move extended a weeks-long rout that has pushed yields higher across developed economies, with 30-year Japanese yields touching 4% and U.K. long-dated yields hitting 28-year highs.

Oil prices continued their upward trajectory, with WTI crude trading above $105 per barrel and Brent above $109, as Middle East tensions showed no signs of easing. President Trump signaled a delay in potential military action against Iran, tempering some immediate escalation fears, but markets remained wary of prolonged disruptions to energy supplies. “Without a clear de-escalation, the risk premium on oil will stay elevated,” said a senior trader at a New York-based hedge fund. “That feeds directly into inflation expectations and bond yields.”

Rising yields weighed on equities, with the S&P 500 and Nasdaq both slipping as growth and tech stocks—sensitive to higher discount rates—led the decline. All eyes are on Nvidia’s earnings due this week; the semiconductor giant is seen as a bellwether for AI demand. “Nvidia needs to deliver not just strong numbers but a bullish outlook to reverse the rate-driven pressure on tech,” said an analyst at a major investment bank. Meanwhile, SpaceX is expected to file its IPO prospectus, a move that could test investor appetite for high-growth names in a rising-rate environment. Attempts to reach SpaceX for comment were unsuccessful.

The bond selloff is not purely a U.S. phenomenon. In Japan, the 30-year yield breached 4% for the first time in decades, while the UK’s 30-year gilt yield hit its highest since 1997. “This is a global repricing of term risk,” said a fixed-income strategist at a European asset manager. “Central banks are being forced to keep rates higher for longer, and markets are finally absorbing that.”

Efforts by the Federal Reserve to manage inflation expectations have been complicated by the energy shock. Markets now price in at least one more rate hike before year-end, reinforcing the “higher-for-longer” narrative. “The Fed is caught between sticky inflation and slowing growth—a classic stagflation scenario,” said a former Fed official in a note.

Correction: An earlier version of this article stated that 30-year Japanese yields hit 4.5%. They touched 4%, not 4.5%.