Bond Market Rout Triggers Equity Selloff as Inflation Fears Resurface

Treasury yields surged to multiyear highs, with the 10-year note breaching 4.55% for the first time since May 2025. The 30-year rate topped 5.1%, its highest level in over three years. This bond market upheaval sparked a broad equity retreat, reversing Thursday's gains that had briefly lifted the Dow above 50,000 and the S&P 500 past 7,500.

Tech stocks bore the brunt of the selloff, with the Nasdaq Composite dropping 1.3% and the Nasdaq 100 sliding 2% in early trading—its worst performance since late March. The flight from risk assets comes as oil price volatility and Middle East tensions complicate the inflation outlook, while stronger-than-expected CPI data revives fears of Fed hawkishness.

Market participants are reassessing exposure to growth-sensitive assets, particularly in the crypto sector where Bitcoin and Ethereum have shown heightened correlation to tech stocks. The selloff coincides with fading momentum in the AI trade that had propelled markets earlier this year.