Global Bond Selloff Pushes 10-Year Treasury Yield to the Cusp of 5% as Oil Tops $100 and Rate-Hike Fears Mount

A global bond selloff drove the U.S. 10-year Treasury yield to just under 5% on September 11, with borrowing costs from Tokyo and Sydney to London and New York at multi-decade highs. Oil prices surging well past $100 a barrel, a more than six-month Middle East conflict, and rising odds of a Federal Reserve rate hike at its meeting next week combined to stoke stagflation fears across markets. The European Central Bank raised rates on Thursday and warned that price pressures could prove lasting, while August U.S. producer price data released the same day reinforced expectations of imminent Fed action. Investors are now watching August CPI figures, due out shortly, as the next key test for rate expectations.

Stock markets moved toward correction territory under the weight of rising yields. Bloomberg and Wall Street Journal reporting noted the dollar edged higher even as yields briefly eased from their peaks, and NewEdge strategist Dawson described bond yields as being in distinct uptrends. The S&P 500 remained under pressure, with Bank of America strategists warning that U.S. equity funds shed $14.2 billion over the past three weeks, the largest outflow since January, citing EPFR Global data, and that markets and policymakers remain complacent about the yield surge.

In pre-market trading on September 11, the 10-year yield held near 4.95% and the 2-year yield slipped to 4.57%. Adobe fell 2.35% as tech sentiment stayed mixed, and Robinhood dropped 2.51% alongside a Bitcoin pullback below $78,000. Copart bucked the trend, surging 8.42% on strong quarterly execution metrics. Bitcoin later recovered modestly as yields eased slightly from their intraday highs, though the broader risk-off tone persisted.