Global bond markets sold off sharply after President Trump turned down an opening from Iran to accept his own proposed peace terms, choosing confrontation over a deal that was reportedly his for the taking, according to Fortune. The selloff pushed yields higher across three major markets at once, a rare degree of coordination that shows how directly investors are reading the standoff.
The US 30 year Treasury yield climbed to 5.278 percent, closing in on the 5.3 percent level that has previously triggered Treasury buybacks aimed at capping borrowing costs. In the UK, the 30 year gilt yield hit 5.8906 percent, its highest level since 1998, while Japan's 10 year bond yield reached 2.992 percent, a level not seen since 1996. Equity markets moved in sympathy, with S&P 500 futures down 0.53 percent and European and Asian indices posting mixed losses. Brent crude, meanwhile, rose to $92 a barrel as the geopolitical risk premium built back into oil prices.
The frustration among investors stems partly from how close a deal appeared to be. Iranian President Masoud Pezeshkian offered to accept the memorandum of understanding Trump himself proposed back in June, terms that would have ended hostilities, lifted sanctions, and included $300 billion in reparations. Instead of taking the opening, Trump said he plans to hit Iran hard, signaling no interest in closing the agreement despite Tehran's apparent willingness to sign on to his own terms.
For bond markets already uneasy about elevated government debt levels and persistent inflation pressure, the rejection removed one of the few near term catalysts that could have lowered geopolitical risk and, with it, borrowing costs. Instead, yields moved higher across the US, UK, and Japan in the same session, and oil prices moved up alongside them, leaving investors to price in a standoff with Iran that looks likely to run longer rather than resolve.