US Treasury yields roared higher Wednesday after S&P Global's September PMI report showed business output accelerated at the fastest pace in five years, fueling bets on further Federal Reserve rate rises. The 10-year yield jumped 0.13 percentage points to 5.09 per cent, the highest since 2007, while two-year yields climbed 0.15 points to 4.89 per cent. Chris Williamson, chief business economist at S&P Global Market Intelligence, said "US business continues to boom" with the greatest improvement since early 2015.

The surge extends a dramatic rise in yields since the start of the Iran war, driven by inflation pressures, deficit fears, and a strong economy. Oil prices rallied with Brent crude up 3.4 per cent to $102.58 a barrel. US Treasury Secretary Scott Bessent has tried to contain yields by upsizing purchases of long-term debt, but the expanded scheme has not provided lasting relief. The Treasury said it would buy up to $6bn of 20 to 30-year bonds Thursday.

Fed Governor Michael Barr said "further policy adjustments are likely to be needed," and futures markets now price a 66 per cent chance of a rate rise in late October. Boston Fed President Susan Collins warned of an "increased likelihood" inflation remains above the 2 per cent target. The Atlanta Fed's GDPNow tracker forecasts 5.1 per cent annualised growth in Q3. US stocks slipped with the S&P 500 down 0.6 per cent and Nasdaq 100 falling 0.9 per cent.