Investors Are Driving Government Bond Yields Higher
US 10-year Treasury yields reached their highest level since 2002 as rising oil prices revived a global bond selloff. The move erased a 0.7% gain in S&P 500 futures linked to Micron’s upbeat forecast and pushed 30-year UK gilt yields to 6%.
A renewed rise in oil prices sent another shock through government bonds as markets opened across Europe. The US 10-year Treasury rate rose five basis points to its highest level since 2002, while 30-year UK gilt yields reached 6% for the first time since 1998. Brent crude briefly touched $100 a barrel.
The move reversed an early equity rally tied to Micron Technology’s upbeat forecast. S&P 500 futures had gained as much as 0.7% before the increase in oil and bond yields erased that advance.
Micron is the company most directly linked to the opening move: its forecast had driven the initial AI-trade gains, but higher rates then overwhelmed that support in futures trading. The bond selloff also extended beyond the US, with long-dated UK government borrowing costs reaching a level not seen since 1998.
The immediate market tension is between continued enthusiasm for AI-linked demand and the pressure from energy prices and higher sovereign yields. The next developments to watch are further moves in Brent, the US 10-year rate and UK gilt yields, alongside the next US inflation and Federal Reserve updates.
The 10-year Treasury yield hit its highest since 2002 as Brent crude briefly reached $100, erasing S&P 500 futures gains.
Higher sovereign yields and $100 oil are tightening financial conditions just as Micron’s AI-led forecast had lifted futures, creating a direct test for the durability of the technology rally. Micron’s latest company profile shows $37.4B in fiscal 2025 revenue, up 48.9% year over year, with a 39.8% gross margin, so the AI-demand backdrop is substantial even as rates challenge equity valuations. The read remains two-sided because the bond and oil move is macro-wide rather than a single-company earnings shock.
The setup changes if oil retreats and Treasury yields reverse, allowing the AI trade to regain the ground erased at the open.
CoverageSource: Bloomberg Television · Published here THU, OCT 1 · 7:08 AM ET · 9 reports · 4 publishers in this record · latest listed: Financial Times · FRI, OCT 2 · 2:56 AM ETHow this is decided →
- Investing.com — Wall Street down amid rising oil and volatile bonds, data shows inflationary angst
- NYT Business — U.S. Bond Yields Hit Highest Level Since 2002
- Investing.com — FTSE 100 today: Stocks tumble as gilt yields top 6%, U.S.-Iran standoff drags
- Investing.com — Yields fall after US 10-year hits highest since 2002; stocks, euro also decline
- Investing.com — European stocks close at three-month lows as surging bond yields hammer banks
- Investing.com — Treasury yields reach multi-decade highs on economic data
- Bloomberg Television — US Benchmark 10-Year Bond Yields Hit Highest Level Since 2002
- Financial Times — Global bond market steadies after sharp sell-off
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Micron’s $37.4B revenue and 48.9% year-over-year growth show concrete AI-demand momentum that could withstand a temporary rates shock.
The 10-year yield is at its highest since 2002 and Brent briefly reached $100, a combination that can keep pressure on long-duration technology valuations.
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