By: Fiona Cincotta, Senior Market Analyst
Global bond yields are rising on both sides of the Atlantic, with the 30-year UK gilt yield reaching its highest level since 1998 even as the Nasdaq trades at record highs. Weaker U.S. data has trimmed Federal Reserve rate hike expectations, yet U.S. Treasury yields remain elevated and the U.S. dollar keeps climbing. In Europe, fiscal concerns in France and the United Kingdom are adding pressure to bonds, the euro and UK equities. The contrast shows how much strain in global bond markets sits beneath the U.S. tech rally.
Fiona Cincotta, StoneX Senior Market Analyst, has spent more than 15 years trading and analyzing UK, European and U.S. markets. Her coverage spans forex, equities and commodities, with a particular focus on UK and European market themes and the macroeconomic data that moves them.
U.S. Treasury yields remain elevated even though Federal Reserve rate hike odds for October fell from about 70% to about 24%, a sign that global bond yields, not U.S. data, are setting the tone for markets. The nonfarm payrolls report showed 29,000 jobs created against 90,000 expected and an unexpected rise in the unemployment rate to 4.2%, yet the 10-year Treasury yield sits near its highest level since 2002. U.S. equities have split along the same fault line. "Whilst you've got those record highs on the Nasdaq, we've got the S&P 500 pretty much breaking even," Cincotta says, adding that "what's going on in the Treasury market continues to be a key driver." For traders, that means moves in the bond market can override softer U.S. economic data in setting the direction of the U.S. dollar and equity indices.
The 30-year UK gilt yield has risen to its highest level since 1998, and the FTSE 100 has dropped about 2% as fiscal concerns push European bond yields higher. According to Cincotta, "there are concerns over the fiscal position in the UK and the government's lack of want to rein in spending," with attention turning to the upcoming UK budget. The pressure is not confined to Britain, as bond yields across Europe have climbed on worries over France's budget and political uncertainty ahead of elections. Rising European yields are also sharpening a divergence with the U.S., leaving the euro at its lowest level against the U.S. dollar since May 2025. As a result, UK equities and the euro sit on the front line of the global bond selloff, in sharp contrast with the record run in U.S. tech.
--- Written by Frédéric Guétin, StoneX Media Producer
--- Expert: Fiona Cincotta, StoneX Senior Market Analyst
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Record highs on the Nasdaq are masking a bond selloff that runs from U.S. Treasuries to UK gilts. Fiscal worries in Europe and the UK are pushing yields higher and weighing on the euro and the FTSE 100, even as U.S. rate hike expectations fade.
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