On October 5, yields on long-term US government bonds reached a 24-year high: 10-year Treasuries briefly rose to 5.35%, while 30-year bonds climbed to about 5.7%, levels last seen in 2002 (source).

ISM Services Report Heightens Inflation Concerns

The latest ISM report on the US services sector provided fresh momentum to the bond market: the prices index rose to 74 points, the highest since July 2022, increasing inflation concerns.

High Treasury Yields Typically Pressure Risk Assets

Rising government bond yields are generally negative for risk assets: Treasuries become more attractive, borrowing costs increase, and demand for risk declines.