Stock Markets Slide as Bond Yields Hit 20 Year High

US stock markets are facing heavy pressure this week as the 30 year bond yield climbed to 5.35 percent. This is the highest level we have seen since June 2007. The latest Producer Price Index data added to the worry, coming in at 5.4 percent, which was higher than what most analysts expected to see.

Geopolitical conflict is a major factor driving this market volatility. The ongoing US Iran situation has disrupted the Strait of Hormuz, pushing oil prices back up to 100 dollars per barrel. Because oil shipping has been inconsistent for months, markets are pricing in the risk of a major energy shock.

Major indexes like the Dow Jones, the S&P 500, and the Nasdaq all ended lower on Thursday. Investors are worried that these rising costs will force the Federal Reserve to keep interest rates high to fight inflation. With midterm elections approaching, officials have suggested that oil prices may remain elevated for at least another two months, potentially leading to more losses for stocks.