Why is Wall Street so worried about a 5% Treasury yield? | Morning Bid

Global bond markets are facing a significant sell-off, pushing the U.S. 10-year Treasury yield toward a critical 5% threshold. This surge in borrowing costs, fueled by concerns over U.S. debt sustainability and expansive fiscal promises, threatens to trigger a broader equity market liquidation. Treasury Secretary Scott Besent’s recent $6 billion bond buyback failed to calm investors, who remain skeptical of government interventions typically seen in emerging markets. Simultaneously, the Federal Reserve’s upcoming interest rate decision hinges on the August CPI report; rising energy costs and oil prices exceeding $100 a barrel have increased the likelihood of a rate hike to over 70%. Amidst this macroeconomic volatility, Oracle provided a bright spot in the corporate sector, reporting 121% growth in cloud sales. This robust performance suggests that despite broader market nerves, high-scale investments in artificial intelligence are beginning to deliver tangible financial returns.