Stocks fell alongside bonds, driven by concerns over government finances and lingering inflation risks at a time when equities are hovering near all-time highs.
Futures for the S&P 500 retreated 0.5% as Wall Street returned from a long weekend, building on the tech-driven selloff that closed out last week. Europe’s Stoxx 600 fell 0.6%. Gold briefly topped $3,500 an ounce, fueled by mounting bets on rate cuts and unease about the Federal Reserve’s independence.
Global bonds staged a broad retreat, led by sharp declines in longer-dated debt. The yield on 30-year Treasuries climbed four basis points to 4.97%, while their UK counterparts hit the highest since 1998 amid Prime Minister Keir Starmer’s struggle to restore market confidence. The pound led losses among major currencies as the dollar headed for its first advance in six days.
The record-breaking stock rally faces a crucial test this month, with jobs data, inflation figures and the Fed’s rate decision all due in the coming weeks. Adding to the pressure are tariff tensions and concerns that President Donald Trump’s attacks on the Fed could stoke longer-term inflation.
“I think it’s clear that the pressure on yields, particularly in France and in the UK, is clearly weighing on the stock market this morning,” said Andrea Tueni, head of sales trading at Saxo Banque France. “There’s a lot of caution around moving closer to key US inflation and labor market data. That warrants some prudence moving forward.”
