Treasury Yields Hit 4.71% as Oil Surge Rekindles Inflation Fears

The bond market sold off Monday, with the 10-year Treasury yield climbing six basis points to 4.71%, as the sharp rally in crude oil revived inflation worries days before the July consumer price report. The move pressured equities, with the S&P 500 slipping 0.06%, the Dow falling 0.11%, and the Nasdaq 100 dropping 0.34%.

The selloff spread overseas, with government bonds in Australia and New Zealand following Treasuries lower in Tuesday trading. U.S. stock futures steadied Tuesday morning, with S&P 500 contracts up about 0.1% and Nasdaq futures gaining around 0.4%, helped by July's surprise loss of 23,000 payrolls, which traders read as reducing the odds of further rate hikes.

Rate-sensitive corners of the market, including real estate and dividend-heavy names, trailed in Monday's session as yields advanced. Wednesday's CPI print now looms as the week's key test of whether the oil-driven inflation scare has legs.