Global Bond Selloff: Economic Ripples and Market Reactions

A worldwide bond selloff continued, exerting pressure on Wall Street stocks and strengthening the dollar as the robust U.S. economy reduced hopes for immediate rate cuts. The 10-year Treasury yield peaked since April 2024. Healthcare and industrials drove stock gains, while energy declined. Markets await non-farm payroll data.

Wednesday witnessed a continued global bond selloff, placing pressure on Wall Street stocks and strengthening the dollar, as signs of a strong U.S. economy quelled expectations for rapid rate cuts. Notably, the 10-year U.S. Treasury yield climbed to a post-April 2024 high of 4.73%, fueled by a recent 7 basis point hike.

On Wall Street, the benchmark S&P 500 remained largely lower for much of the session before closing higher, while the Dow also saw gains. In contrast, the Nasdaq fell. Sectors like healthcare, materials, and industrials propelled stock gains, but communication services and energy slumped. The bond market's selloff accelerated following news that President-elect Trump might declare a national economic emergency to enact tariffs.

Global markets reflected similar patterns; European shares dipped, with the STOXX 600 dropping 0.2%. German 10-year yields reached a six-month high, and British 10-year gilts hit levels unseen since 2008. Meanwhile, U.S. Treasuries experienced downward pressure due to robust economic data. Market focus turns to Friday for comprehensive non-farm payrolls data as investors brace for potential changes.

(With inputs from agencies.)