Bond yields jump, stocks fall, oil rises

Bond yields jumped Thursday, erasing the declines stemming from of the Treasury Department’s unusual intervention in the debt market a day earlier.

Bond yields jumped Thursday, erasing the declines stemming from of the Treasury Department’s unusual intervention in the debt market a day earlier.

In early trading, the 10-year Treasury bond yield rose as high as 4.71%, its highest level since Tuesday. The 30-year yield spiked to as high as 5.267%, rising just above the level yields were at when the Treasury Department’s action Wednesday.

As those yields rose, stocks also dropped at the opening bell. The S&P 500 dropped 0.3% and the Nasdaq Composite fell 0.8%. The Dow fell 400 points.

Meanwhile, oil prices accelerated again. U.S. crude oil briefly touched $89 per barrel and international oil benchmark Brent rose to almost $95. The move higher in energy prices came after Trump threatened “economic warfare” on Iran. Gas prices also rose: The national average jumped another two cents from Wednesday to $4.10 per gallon.

The Treasury Department’s surprise announcement on Wednesday effectively meant that it would be a bigger buyer of longer-term bonds. In the immediately aftermath, bonds rallied and yields dropped on that news. However, the impact was short lived, and many market watchers and investors cast doubt on the impact the Treasury’s move would have in the long-run.