Stocks slightly lower after selloff, global yields hit fresh highs

US stocks edged slightly lower on Tuesday following a selloff the previous day, as global yields reached record highs due to concerns over rising oil prices. The Nasdaq futures fell 0.10%, while the S&P 500 futures dropped 0.15%. MSCI's global stocks index declined 0.18% after falling 0.65% the prior day. European stocks also faced pressure, with the STOXX 600 down 0.10% and the European tech index recovering slightly after Monday's sharp decline.

The de-rating process in equity markets has been measured, with volatility triggered by specific events rather than a widespread loss of confidence. Despite equities trading at more attractive valuations, the bull market continues with solid momentum. Oil prices surged above US$105 per barrel as Yemeni forces aligned with Iran launched new attacks on Saudi Arabia and advanced along the Red Sea coast.

US 10-year Treasury yields hit their highest level since 2007, reflecting a series of anticipated rate hikes from the Federal Reserve. German Bund yields reached their highest point in over 17 years at 3.56%, indicating strong expectations of European Central Bank rate increases. The US dollar strengthened as traders priced in multiple Fed rate hikes, but some analysts warned that high yields could stoke fears of a deeper correction in risk assets and prompt investors to seek refuge in the US currency.

The Bank of Japan is expected to raise interest rates by 25 basis points at its upcoming meeting, continuing its tightening cycle to support the yen after a recent intervention.