Global Bonds Slide as Middle East Tensions and Fed Rate Bets Weigh on Markets

U.S. stock futures dipped and global bonds resumed their selloff as markets weighed renewed Middle East tensions after President Donald Trump rejected Iran's proposal to reopen the Strait of Hormuz, with oil prices rising and Asian equities softening. The 2-year Treasury yield climbed five basis points to 4.90% and the 10-year rose four basis points, driven by traders pricing a more hawkish Federal Reserve rather than inflation fears, as inflation breakevens barely moved. Strong growth and resilient employment support expectations of at least one more 25 basis point hike before year-end. Gold fell 1.2% toward $4,233 as higher real short-end rates hurt the non-yielding asset, while the dollar strengthened against major peers. Key data releases this week, including PCE and payrolls, will determine whether the bond selloff extends further.