US bonds sell off as rising oil prices create inflation anxiety

Rising oil prices are raising inflation fears and pushing bond yields higher, weighing down stocks on Wall Street. The Dow Jones Industrial Average fell 299 points, or 0.6%, as of 9:33 a.m. Much of the pressure being felt by Wall Street is coming from a sell-off in U.S government bonds.

The yield on the 10-year Treasury rose. Oil prices continued climbing, putting more pressure on inflation. Markets in Europe were mostly lower and markets in Asia were mixed.THIS IS A BREAKING NEWS UPDATE.

AP’s earlier story follows below.A heavy sell-off in U.S. government bonds is gaining momentum with anxiety about persistent inflation driving prices lower.The yield on the two-year Treasury, which closely tracks expectations about Fed moves, rose to 4.35%, on Tuesday. That’s up significantly from about 3.50% at the beginning of 2026.

Meanwhile, the yield on the 10-year Treasury rose to 4.79% from 4.73% late Friday. That’s the highest it has been since January 2025.The bond sell-off is global, with other nations facing the same economic pressures.Japan’s 10-year bond yield touched 3%, a level it hasn’t hit since 1996. In Germany, the 10-year bond yield also rose to 3%, a 15-year high.The U.S.

debt surpassed $40 trillion two weeks ago, a shocking milestone as defense costs and interest on the burgeoning deficit make up an enormous share of federal spending. But investors are asking governments across the globe to pay more, with the perceived risk rising.Futures for the S&P 500 index fell 0.6%, while the Dow Jones Industrial Average declined 0.8%. attacked rocket launchers on an Iranian island on Sunday, saying they were preparing to launch mines into the Strait of Hormuz.

Meanwhile, the United Arab Emirates said it intercepted an Iranian drone over its waters on Monday.September is off to a tepid start, a day after Wall Street closed out August on a downbeat note. The S&P 500, Dow Jones Industrial Average and the Nasdaq composite all declined on Monday. And the losses were broad, with nearly every sector within the benchmark S&P 500 finishing in the red.Tech stocks are also back in focus, with shares of Nvidia, Microsoft, Alphabet and Micron Technology all declining before the market open.Oil prices remain high as the Iran war has curtailed traffic in the Strait o…