A New Increase in Bond Yields Startles Stock Traders – Europe Market Wrap

Global stock and bond markets fell further on Monday, weighed down by declining bets on Fed interest rate cuts and a new oil price increase that threatens inflation.

Wall Street was likely to add to Friday’s losses, with S&P 500 futures down 0.8% and Nasdaq 100 futures down 1.3%. Premarket trading saw high-profile losses for tech stocks such as Tesla and Nvidia. European stocks fell 0.8%, with technology companies leading the slide.

World markets, already in upheaval since the beginning of 2025, experienced a new setback on Friday as a blowout US employment report forced traders to decrease their bets on Fed rate cuts to less than 30 bps for the entire year, while another dataset showed an increase in inflation expectations. The statistics triggered a selloff that erased the S&P 500’s year-to-date gain.

Ten-year Treasury rates increased further to a 14-month high, although 30-year borrowing costs remained just below the psychologically important 5% level.

China is another source of pressure on market sentiment, with shares continuing to fall despite statistics showing record exports last year. The offshore-traded Yuan fell to near-record lows against the Dollar, requiring officials to increase currency assistance and tighten capital controls.

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