US bond selloff deepens as oil, yields climb

US Treasuries came under fresh pressure on September 28, 2026, as yields rose across key maturities. The two-year Treasury yield, seen as sensitive to interest rate expectations, climbed about five basis points to 4.90%. The 10-year yield moved to roughly 5.2%, with some reports placing it slightly above that level. These levels marked a continuation of the upswing that had pushed yields to multiyear highs the previous week.

Longer-dated securities also weakened, with the 30-year yield reported above 5.5%. The selling in US government bonds was part of a broader move that also saw sovereign bonds fall in markets such as Japan and Australia. The shift reflected investors demanding higher compensation to hold longer-term debt amid mounting macroeconomic concerns.

The bond market losses coincided with a rally in oil prices, which accelerated after President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz. That strait is a critical channel for Persian Gulf energy exports, and the rejection signaled no imminent resolution to constraints on regional supply. Reports described the United States and Iran as remaining far apart on efforts to restore energy shipments from the area.

On September 28, oil prices were reported to have jumped as signs emerged that negotiations were not making progress. Trump had publicly dismissed a cease-fire proposal from Iran offered the prior week, calling it unacceptable. Iran’s foreign minister characterized that response as a first reaction and said he was awaiting definitive news through intermediaries, underscoring the uncertainty surrounding the talks.

The combination of rising oil prices and stalled talks heightened concern that energy supplies would remain tight. Higher crude prices fed into market worries about future inflation, given the role of energy costs in broader price levels. These concerns were amplified by the backdrop of Treasury yields already at multiyear highs after earlier hawkish comments from Federal Reserve officials.

Reports indicated that the oil-led move and the ongoing US‑Iran impasse helped push market pricing toward the possibility of further Federal Reserve tightening. Investors reacted by selling rate-sensitive securities, contributing to the rise in shorter-term yields. The resulting shift in the yield curve reflected both inflation anxiety and expectations that policy rates could stay higher for longer.

The move in US Treasuries reverberated in other major bond markets. Sovereign bonds in Japan and Australia also declined, mirroring the pressure seen in US debt. The synchronized selloff suggested that investors globally were reassessing interest rate and inflation risks in light of the latest geopolitical developments.

Taken together, the rise in yields, jump in oil prices, and lack of progress in US‑Iran discussions reinforced a cautious tone in fixed-income markets. With key US benchmark yields around or above 5% across several maturities, markets appeared focused on the risk that inflation could prove more persistent if energy supplies remain constrained.