US stocks pulled back from their record highs on Wednesday and indexes fell across much of Europe and Asia.
The S&P 500 slipped 0.2%, a day after topping its prior all-time high set in August. The Dow Jones Industrial Average dropped 341 points, or 0.7%, while the Nasdaq composite fell 0.2% from its own record.
In Asia, South Korea's Kospi sank 2% following a sharp drop for SK Hynix, one of its two dominant stocks.
France's CAC 40 stock index dropped 1.2% for one of the world's biggest losses after yields for French bonds got back to jumping amid worries about the government's debt and strained budget.
Bond yields swing
US stocks felt pressure as yields swung in the bond market. The yield on the 10-year US Treasury bond climbed as high as 5.36% in the morning, up from 5.27% late Tuesday and near its highest level since 2002.
Higher yields put downward pressure on prices for stocks and other investments. They can also slow the economy by making it more expensive for everyone to borrow money. But the 10-year yield eased back to 5.28% later in the day after the US Treasury sold $US39 billion of 10-year Treasury notes at an auction. The median yield at the auction was less than 5.26%.
Oil prices continue to yo-yo
Yields also swung with oil prices. They continue to yo-yo amid uncertainty about when the war with Iran will allow the industry to return to normal.
The price for a barrel of Brent crude, the international standard, topped $US102 in the morning before falling back later in the day and eventually settling at $US100.20, down 0.4%. That's below the nearly $US110 it cost last month, but it remains well above its $US72 price from before the war began.
The International Energy Agency said on Wednesday that its members supported accelerating the release of oil from inventories that they announced earlier this year, with a particular emphasis on diesel fuel.
Government debt worries
Also pushing up on bond yields are worries about how much debt the US government and others worldwide have racked up, plus how much more they add to it by the day.
The head of the International Monetary Fund said on Wednesday that record levels of debt for governments was one of the three major crosscurrents driving where the global economy is heading, along with artificial-intelligence technology and high energy prices.
“Some very tough political choices stare us in the face,” IMF Managing Director Kristalina Georgieva said in a speech in Singapore.
She pointed in particular to France and Italy, among other European countries with high debt. Protests across France have raised pressure on the government to increase spending. That could add further to its debt.
