Stocks Fall as Bond Selloff Saps Risk Appetite: Markets Wrap

(Bloomberg) — Technology stocks drove declines in global equities as long-dated bond yields pushed further into multidecade highs and oil prices extended their climb, draining traders’ appetite for risky assets.

The S&P 500 headed for a third straight day of losses as index futures retreated 0.5%. Yields on 30-year government bonds continued to climb across the world, with those on Treasuries up one basis point to 5.32%, the highest since 2007. US crude neared $85 a barrel as tensions in the Middle East showed no sign of easing. The dollar was little changed while gold declined.

Artificial-intelligence-linked stocks bore the brunt of the selling. An exchange-traded fund tracking semiconductor stocks fell 3.6% in premarket trading. Nasdaq 100 futures slid 1.3%. Nvidia Corp. fell 2.2% as the cost of protecting its debt against default closed in on a high reached last month.

Equity markets are struggling under the weight of rising global borrowing costs as bond investors demand higher premiums to finance spendthrift governments and shield against persistently sticky inflation. Higher oil prices on the back of the US-Iran war have also reinforced expectations that central banks will need to tighten monetary policy.

“The Middle East is clearly re-escalating again and long-term interest rates are rising, and these are things that end up corroding the value of equities,” said Emma Moriarty at CG Asset Management. “And in a market where it’s summertime, liquidity is a little bit thinner, it’s a bit more prone to volatility.”

In Europe, French 30-year yields hit their highest since 2008, while their UK peers were approaching 6%. German borrowing costs were poised to hit a 15-year high in a major sale of long-dated debt. The Stoxx 600 equity index headed for a fifth straight day of losses, the longest such stretch this year.

What Bloomberg Strategists Say:

“AI-related spending will continue to be a feature of corporate fundraising in the coming months, which will keep longer-dated Treasuries — and highly correlated German bonds and gilts — under pressure. And the longer that yields stay higher, the worse the outlook for equities.”

— Ven Ram, cross-asset strategist. For the full note, click here.

Yardeni Research warned investors are becoming more concerned about the surge in borrowing by AI hyperscalers and questioning whether the Fed will remain sufficiently vigilant on inflation if oil prices climb again.

“We aren’t pushing the panic button,” strategists led by Ed Yardeni noted. “However, we are closely monitoring whether the bond vigilantes might do so.”

In the near term, the unfolding of events in the Middle East will remain a key focus as both the US and Iran take a tougher line. President Donald Trump said he won’t try to revive a stalled truce with the Islamic Republic, dimming prospects for a swift reopening of the Strait of Hormuz.

Traders expect tech-stock volatility to continue as investors shift their focus back and forth between robust earnings and worries over whether debt-fueled infrastructure investment will deliver sufficient returns to justify the spending.

“You are going to get winners and losers and you’re going to get a lot of wasted capex,” said Justin Onuekwusi, chief investment officer at St. James’s Place. “That, to me, is a huge future challenge.”

Corporate Highlights:

Xiaomi Corp. posted profit that fell less than expected, raising hopes it can weather a persistent memory shortage that’s weakened demand for smartphones. BHP Group’s profit rose by almost a third as buoyant commodity prices lifted earnings, with full-year revenue from copper overtaking iron ore for the first time. Frasers Group Plc increased its stake in Hugo Boss AG to nearly 48%, falling short of taking full control of the German fashion house after only 17.6% of investors accepted its takeover offer. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.5% as of 10:54 a.m. London time S&P 500 futures fell 0.5% Nasdaq 100 futures fell 1.3% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index fell 0.9% The MSCI Emerging Markets Index fell 0.7% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1577 The Japanese yen fell 0.1% to 159.62 per dollar The offshore yuan was little changed at 6.7453 per dollar The British pound was little changed at $1.3531 Cryptocurrencies

Bitcoin fell 0.4% to $64,113.02 Ether fell 0.5% to $1,895.13 Bonds

The yield on 10-year Treasuries was little changed at 4.73% Germany’s 10-year yield advanced three basis points to 3.25% Britain’s 10-year yield advanced two basis points to 5.08% Commodities

Brent crude was little changed Spot gold fell 0.5% to $4,393.56 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Subrat Patnaik, Tasos Vossos and Sujata Rao.

©2026 Bloomberg L.P.