Treasury Yields Near 5% After Soft Foreign Demand: A Red Flag For Stocks?

U.S. Treasury yields climbed sharply Monday after a 20-year bond auction showed signs of weakening foreign demand. This bolstered concerns over America's fiscal outlook and tested the market's tolerance for a 5% long-term yield threshold.

The spike in yields took place after 12:00 p.m. ET, with the 30-year Treasury yield rising 4 basis points to 4.96%, approaching the psychologically important 5% mark. The benchmark 10-year yield also rose 4 basis points to 4.45%.

20-Year Auction Triggers Yield Surge

Exante Data noted that Monday's 20-year bond auction showed a mixed picture of demand.

The U.S. Treasury sold $14.3 billion in bonds at a high yield of 4.94%, with a bid-to-cover ratio of 2.68—landing in the top quartile ...