A rally in oil prices compounded inflation fears and strengthened expectations for further Federal Reserve tightening. U.S. stock futures fell sharply and a selloff in Treasurys intensified in early European trade, as market sentiment wilted at the start of a week that includes crucial releases of U.S. inflation and jobs data. Ten-year yields climbed 4.9 basis points to 5.214%, 30-year yields gained 2.2 basis points to 5.518%. Two-year yields also rose to trade around 4.920%.

Markets are pricing a more than 70% likelihood that the Fed opts for a quarter-point raise next month. Brent crude oil contracts for November delivery rose 2.4% to $106.82 a barrel. Technology stocks led declines in U.S. premarket, with Nasdaq futures dropping 0.9%.

Futures for the S&P 500 and Dow Jones Industrial Average both fell by around 0.4%. Asian stocks started the week mostly lower, with chip stocks dragging on indexes in Japan and South Korea. However, the technology-light Stoxx 600 nudged 0.3% higher in Europe.

Precious metals prices slipped sharply, with New York gold falling 1.9% to around $4,200 a troy ounce, while bitcoin fell below $83,000. For the week ahead, U.S. PCE inflation data Wednesday and the U.S. jobs report Friday will be in focus.