Yields on major U.S. Treasury bonds hit new 24-year highs on Wednesday, as the latest global bond sell-off gained steam. The 10-year Treasury yield rose to 5.36% and the 30-year Treasury yield hit 5.73%, the highest levels for each since 2002. Benchmark government bonds in France and Italy also rose sharply. The yield on the UK’s 30-year government bond has hit its highest level since 1998. When bonds fall, their yields rise. U.S. bond yields retreated later in the day, following a Treasury Department auction of $39 billion worth of 10-year bonds, for which there was strong demand. But at 5.3%, the yield on the bonds auctioned was the highest of any sale of 10-year U.S. government debt since November 2000. “In short, for some reason, probably the 24-year highs in rates attracted buyers and resulted in a large auction,” wrote Peter Boockvar, chief investment officer at One Point BFG Wealth Partners. “In response, the 10-year yield has retreated to 5.27% from 5.31% just before the results.” The bond crash had sent stocks tumbling earlier in the day, but as decades-high yields eased, so did losses among major stock indexes. After hitting all-time highs on Tuesday, both the S&P 500 and Nasdaq fell about 0.3% in afternoon trading. Steeper selling was recorded at 11:30 a.m. ET. The Stoxx 600 index closed down 1%, while benchmark indices in France and Germany closed down around 1.3%. Italy’s FTSE MIB index fell 2.5%. As stocks fell, oil prices swung between gains and losses, but largely hovered around their very high levels. Brent crude oil declined 0.5% but was still above $100 a barrel in afternoon trading. A looming debt crisis The recent rise in bond yields only compounds the pain for governments around the world that have seen their borrowing costs soar since the start of the year. He also predicted that government bond yields around the world would remain under pressure due to the growing rise of artificial intelligence. “Policymakers had a relatively easy ride over the past 17 years, as throughout that time interest rates were stuck below GDP growth rates,” Georgieva said in a speech. “Higher interest rates now put an end to that.” His comments followed multiple reports that Elon Musk’s SpaceX is planning to raise $40 billion in cash to buy artificial intelligence chips from Nvidia. NBC News has not independently confirmed the reports and SpaceX did not immediately respond to a request for comment. But if the company complies, those $40 billion borrowed would join hundreds of billions more in bond sales by AI-linked companies in recent years. Companies are using the money to build data centers and buy equipment to fill them. Some economists believe the huge sums of money being borrowed by private AI companies could put additional pressure on government bond yields. “France may be on the verge of a full-blown debt crisis,” Ed Yardeni, president of Yardeni Research, wrote on Sunday. He noted that the yield on French 10-year government bonds has risen the most of any major economy this year. In second place is the United States, while Italy, a country traditionally considered much riskier by bond markets, is in third place. Apollo economic strategist Huw van Steenis wrote in a Wednesday note: “Hyperscalers have raised $48 billion in bonds in European currencies this year, already more than triple the 2025 total.”
