Finance

The yield on the 30-year Treasury note surged to 5.13%, its highest level since 2007, as investors reacted to persistent inflation pressures and climbing energy costs. This spike in yields has increased borrowing costs and weighed heavily on small-cap stocks, with the Russell 2000 underperforming major benchmarks.

Energy markets remain on edge as the Strait of Hormuz remains effectively closed due to ongoing conflict involving Iran, leading to global inventory concerns. Brent crude prices are expected to remain elevated near $106 per barrel through June as diplomatic efforts to secure supply routes have stalled.

Financial markets are increasingly pricing in an extended pause for the federal funds rate, which currently sits in the 3.5% to 3.75% range. Persistent above-target inflation and a resilient labor market have led several major brokerages to push back their expectations for any potential rate cuts until at least late 2026 or early 2027.