Strong nominal growth carries a message for Treasury yields. Read more in today’s WSJ Economics newsletter:

US Treasury yields soared to levels not seen in more than two decades on Thursday, as investors unloaded bonds amid fresh economic data and surging oil prices fueling inflation fears. The benchmark 10-year note's yield hit its highest point since April 2002, extending its sharpest quarterly gain since 1994. The 30-year Treasury yield also reached a level last observed in late May 2002.

Manufacturing activity in the U.S. remained largely flat in September, according to the Institute for Supply Management, with input prices surging due to high demand. This data highlighted persistent inflationary pressures. Unemployment benefits applications fell last week, while layoffs decreased in September, suggesting a stable labor market despite employers' reluctance to increase hiring.

2-year Treasury note yields fluctuated throughout the session, sliding to their lowest levels in three days after peaking since May 2024 earlier in the week. Oil prices climbed nearly 2% after China halted oil exports, threatening already strained fuel supplies due to the U.S.-Israel conflict with Iran.