Wall Street’s risk‑on rally stumbled Friday as a global bond sell‑off thrust the 10‑year Treasury above 4.5%, lifted Japan’s 30‑year yield to 4% and pushed UK long‑bond yields to a 28‑year peak. The S&P 500 slipped more than 1%, led by technology stocks, while oil breached $105 a barrel after the Trump‑Xi summit failed to defuse the Strait of Hormuz tension.

Investors had long shrugged off Middle‑East flare‑ups, inflation scares and supply shocks, allowing equities to chase record highs and corporate credit spreads to stay tight. This week, back‑to‑back hot inflation prints and sharply rising long‑dated yields forced traders to price a potential Fed tightening cycle, sparking fears that the rally now hinges on lofty valuations despite higher borrowing costs.

Despite the pullback, U.S. stocks closed their seventh straight week of gains, yet eight of eleven S&P sectors posted losses this month, leaving tech as the sole driver. Credit markets held firm, with investment‑grade and high‑yield spreads unchanged, buoyed by solid earnings. The bond surge raised the cost of the risk‑on bet, forcing investors to question whether equities can keep growing as financial conditions tighten.