US Equities Edge Lower as Bond Yields Climb Amid Inflation Concerns

US equities closed slightly lower on Tuesday as government bond yields continued their ascent, driven by concerns over inflation and labor market data.

The 30-year Treasury bond reached its highest level since June 2002 at 5.6206 per cent, while the benchmark 10-year Treasury bond hit a high of 5.293 per cent, its highest mark since June 2007.

However, stocks pared their declines as yields eased from earlier highs and shorter-duration yields fell due to declining oil prices and comments from Federal Reserve officials.

Fed President John Williams said the central bank has time to weigh data before deciding on further interest rate hikes, which contributed to a decline in expectations for a 25-basis-point rate hike at the October meeting to 51.5 per cent from nearly 70 per cent earlier in the session.