U.S. Treasury Yields Spike as China Trade Tensions Simmer—Wall Street Braces for Impact

Bonds bleed as markets react to yet another geopolitical standoff—because nothing says ’stable investment’ like a good old-fashioned trade war.

Rising yields signal investor jitters, while Beijing’s trade-agreement posturing keeps the financial world on edge. Guess who gets to foot the bill? Hint: It’s not the hedge funds.

No clear end to trade policy confusion

“It is really hard to keep up or predict what’s going to happen on trade at the moment, and that’s before we factor in the full ramifications from the court ruling last Thursday night, and then subsequent brief stay of execution for them on appeal,” Deutsche Bank analysts said in a note.

“For now it seems likely that the tariff uncertainty will linger for a long time ahead even if we’re still likely past the peak aggressiveness of U.S. policy.”

This week, investors will also get several economic reports that could show how tariffs are affecting growth. One key report is the May nonfarm payrolls figure, due on Friday, which will reveal how many jobs were added last month.

Treasury Secretary Scott Bessent said that the U.S. is not going to miss its debt payments. “That is never going to happen,” he said.

“We are on the warning track and we will never hit the wall.” His comments came just days before the Senate resumes talks over President Trump’s tax and spending bill, which Republicans are using as leverage to raise the federal debt ceiling.

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