U.S. 30-year Treasury yield surged to its highest level in over 20 years

US stocks opened lower on Thursday as investors worried about inflation and rising bond yields. The 10-year Treasury yield had risen above 5%, reaching its highest level since 2007. This increase in long-term Treasury yields could lead to higher borrowing costs across the economy. In addition to the bond market concerns, there are also worries about persistent inflation, as indicated by an S&P economic barometer showing strong business growth.

Rising oil prices, currently trading above $105 a barrel, add another layer of inflation risk. Higher oil costs affect businesses, transportation, and consumers, potentially making it harder to control inflation. The Federal Reserve is expected to continue raising interest rates, with a 69% chance of another hike in October, according to market expectations.

This combination of high Treasury yields, inflation worries, and potential further Fed rate hikes is creating pressure on stocks. Higher yields can make safer government debt more attractive compared to riskier assets like stocks, particularly for growth and technology stocks. While investors remain optimistic about the potential of artificial intelligence and major technology companies, these factors add complexity to the market.

The broader market is also watching US-China relations, with President Trump's planned meeting with Chinese President Xi Jinping expected to be a major event for investors.