Global equities declined on Tuesday as surging government bond yields weighed on risk appetite, with major U.S. and Asian benchmarks leading losses. The S&P 500 fell 0.9%, the Nasdaq dropped 1.3%, and the Dow Jones slipped 0.2%, while South Korea’s KOSPI declined 1.5% and Japan’s Nikkei slid 2.5%. European shares retreated 0.6%, though the UK’s FTSE 100 remained flat.
The selloff followed a sharp rise in sovereign yields, with the U.S. 10-year Treasury yield reaching 4.7480%, its highest level since January 2025. The 30-year yield climbed to 5.33%, the highest in 19 years, while Japan’s 10-year government bond yield hit a 30-year peak of 2.945%. The U.S. 2s/30s yield curve steepened to its widest spread versus the federal funds rate in four years, having been negative during parts of 2023 and 2024.
The surge in yields coincided with a record pace of corporate bond issuance in 2026. According to SIFMA data, U.S. corporate bond sales totaled nearly $1.7 trillion through August, up 27% year-over-year and already surpassing July’s monthly volume. Analysts note the market is on track to exceed last year’s record issuance of $2.2 trillion.
Sector performance in the S&P 500 was mixed, with technology down 2% and the Philadelphia Semiconductor Index falling 5%. Healthcare and energy were notable exceptions, each rising 1.7%. Johnson & Johnson advanced 3.3%, while Caterpillar declined 4.6%. Among retailers, TJX, Target, and Lowe’s are scheduled to report earnings on Wednesday.
Foreign exchange markets showed limited movement, with the U.S. dollar broadly flat despite softer U.S. economic data. The USD/JPY pair hovered near 160.00. The New Zealand dollar was the top G10 gainer, up 0.5%, while the Chilean peso led emerging market decliners, down 1%. The Colombian peso was the strongest EM currency, gaining 1%.
Commodities were mixed, with global oil prices reaching a three-week high and U.S. diesel refining margins surging above $100 per barrel for the first time on record. Gold, however, fell 1%.
Looking ahead, key events on Wednesday include interest rate decisions in Indonesia, UK inflation data for July, a $16 billion U.S. Treasury auction of 20-year notes, and the release of the Federal Reserve’s July 28–29 meeting minutes.
