Global markets fall as bond yields jump on growing inflation fears

S&P 500, Nasdaq 100, and Dow futures all declined slightly after major U.S. indices posted their third consecutive daily losses on Tuesday, pressured by rising Treasury yields. The 30-year U.S. Treasury yield briefly climbed above 5.19%, its highest level in nearly 19 years, while the 10-year yield reached its highest level since early 2025 amid renewed inflation concerns. In Japan, long-term government bond yields eased slightly after recent record highs, while shorter-term yields continued rising.

Markets are now heavily focused on Nvidia‘s earnings, seen as a key indicator for the strength of the AI sector and chip demand. Investors are also watching upcoming Fed minutes for clues on future monetary policy. Asia-Pacific markets declined Wednesday as investors reacted to rising global bond yields and growing geopolitical tensions surrounding the Iran conflict. Japan’s Nikkei 225 fell 1.3%, South Koreas Kospi lost 0.7%.

U.K. inflation slowed to 2.8% in April, lower than expected and down from 3.3% in March, helped mainly by a new energy price cap introduced in early April. However, inflation pressures are still expected to remain elevated as higher global energy prices linked to the Iran conflict continue affecting the U.K., which is a major energy importer.

Gold prices remained under pressure on Wednesday, trading near their lowest levels since late March around $4,470, as a stronger U.S. dollar and rising expectations for tighter Federal Reserve policy weighed on the precious metal.

Higher oil prices are strengthening expectations that the Federal Reserve may keep interest rates higher for longer, with markets now pricing in more than a 55% chance of a Fed rate hike in 2026. Rising Treasury yields and a stronger dollar continue pressuring non-yielding assets like gold.