Bonds sold off despite a buyback operation by the Treasury Department. The selloff pushed yields higher across the curve, with the 10-year Treasury yield rising to approximately 4.68%. The move came even as the Treasury conducted a buyback of $2 billion in off-the-run securities, an operation intended to improve market liquidity. Traders noted the buyback saw weak demand, failing to offset broader selling pressure driven by inflation concerns.

Meanwhile, oil prices surged above $107 a barrel, hitting the highest level since November. The jump in energy costs fueled worries that persistent inflation will keep the Federal Reserve from cutting interest rates soon. West Texas Intermediate crude for May delivery rose $1.42 to settle at $107.34 a barrel on the New York Mercantile Exchange.

Adding to inflation fears, the Labor Department reported the Producer Price Index (PPI) for final demand rose 0.5% in March from the prior month, exceeding economist forecasts of a 0.3% gain. On a year-over-year basis, wholesale inflation accelerated to 2.2%. The data suggests pipeline price pressures remain sticky, potentially filtering down to consumer prices and complicating the Fed's policy outlook.