Global Bond Sell-Off Pushes U.S. Treasury Yields to 24-Year Highs

U.S. Treasury yields reached 24-year highs on Wednesday, with the 10-year yield hitting 5.35% and the 30-year yield reaching 5.73%. This spike was part of a broader global bond sell-off that saw benchmark bonds in the United Kingdom, France, and Italy experience their largest one-day jumps since March. The rout triggered declines in global equities, including the S&P 500, Nasdaq, and Europe's Stoxx 600, as investors braced for higher corporate borrowing costs. Brent crude oil prices rising above $102 per barrel added further pressure to yields.

Kristalina Georgieva, chief of the International Monetary Fund, warned that governments must urgently control unprecedented debt levels. She noted that the artificial intelligence boom is keeping global bond yields under pressure due to massive borrowing for hardware and data centers. This trend is highlighted by reports that Space Exploration Technologies Corp. plans to raise $40 billion to purchase AI chips from Nvidia.

Regional instability intensified as Yardeni Research warned that France may be facing a full-blown debt crisis. In the United Kingdom, the 30-year government bond hit its highest yield level since 1998, while German stock indexes fell by more than 1%.