Global bond markets came under renewed pressure on Thursday as rising energy costs and strong investment in artificial intelligence pushed borrowing costs higher across major economies.
The US 10-year Treasury yield climbed to 5.34%, its highest level since 2002, before easing to around 5.28%. The benchmark recorded its largest quarterly increase since 1994 during the July-September period. Bond yields also rose sharply in France, Britain and Japan.
Higher oil prices have added to inflation concerns. Brent crude rose about 42% during the third quarter and was trading around $100 a barrel, as uncertainty surrounding efforts to end the Middle East conflict continued to affect energy markets.
The bond sell-off has weighed on European equities, with banking stocks among the major decliners as investors reassess the prospect of higher borrowing costs for longer.
Technology shares provided some support to markets after strong results from Micron Technology highlighted continued demand for memory chips used in AI systems and data centres. Micron said customer commitments under long-term supply agreements had risen to $32 billion, from $22 billion in June.
The developments leave investors balancing two contrasting forces: rising inflation and borrowing costs on one side, and strong AI-driven investment and technology demand on the other.
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