Markets mixed as 10-year Treasuries near 3 percent

Markets were mixed on Monday.

The S&P 500 was flat, the STOXX Europe 600 rose 0.4 percent and the Nikkei 225 fell 0.3 percent.

“The recent rally in metal prices, and oil prices hitting fresh four-year highs have stoked fears that inflation in the U.S. will pick up sharply, raising interest rate-hike expectations,” said Fiona Cincotta, senior market analyst at City Index.

Mark Kepner, managing director of sales and trading at Themis Trading, said that stocks were given “a slight reprieve” after the US 10-year Treasury yield backed away from the 3 percent level, but added that “we are watching these levels closely”.

“Even a small deterioration in sentiment could trigger a selloff for global equities as yields threaten the upside potential,” said Konstantinos Anthis, head of research at ADS Securities.

Still, Mark DeCambre at MarketWatch questioned whether investors should be so concerned about interest rates.

DeCambre quoted Raymond James analyst Andrew Adams as saying that a “yield curve as flat as it is now does not always lead to an inverted yield curve” and that “some of the best stock market returns in history have come after the yield curve became flatter than it is now”.