Benchmark borrowing costs around the globe jumped Wednesday, before paring back, as investors continue to adjust to the prospect that interest rates will likely stay higher for longer.
The yield on the 30-year U.S. Treasury note briefly breached 5%, while the 10-year equivalent hovered below 4.8%—its highest level since August 2007. Germany’s 10-year Bund yield briefly touched 3%, for the first time in 12 years.
The rapid rise in rates in the past few weeks is increasingly spilling over into other financial markets and denting the allure of riskier assets like stocks. The S&P 500 closed Tuesday at its lowest level since early June, after falling 1.4%.
Stock futures crept higher. Contracts tied to the S&P 500, the Dow industrials and Nasdaq-100 each edged up about 0.1%.
Oil prices retreated. West Texas Intermediate, the U.S. benchmark, fell below $88 a barrel. Brent crude, the international benchmark, traded below $90.
Asian stocks declined. Japan’s Nikkei 225 and South Korea’s Kospi both fell more than 2%. Hong Kong’s Hang Seng set a fresh 2023 low for the second day running.
The Cboe Volatility Index, known as Wall Street’s fear gauge, traded around 20. A VIX reading higher than 20 typically indicates fear is rising among investors.
U.S. private-sector employment rose by a tepid 89,000 in September, payroll processor ADP said, the slowest pace of growth since January 2021.
Readings on services activity and factory orders will arrive shortly after the opening bell.
