US Treasury Yields Cross 5% Threshold Amid Rising Inflation Concerns

US Treasury yields hit a decade-high on Wednesday, crossing the 5% threshold for the first time since 2007. The sharp rise in market borrowing costs and higher oil prices sent stocks into the red, with the Dow, S&P 500, and Nasdaq all down by more than 0.7%. The energy sector was one of the few to buck the trend, rising 1%.

The five-year US Treasury yield crossed the 5% threshold for the first time since 2007, while the ten-year yield reached its highest level since 2008. This could tempt investors to diversify away from expensive stocks and lock in attractive returns on 'risk-free' assets.

US business activity is expanding at its fastest pace in more than five years, according to figures released on Wednesday. However, this has also led to building inflation pressures, which may be a concern for the Federal Reserve.

The visit of Chinese President Xi Jinping to Washington on Thursday will likely be marked with pomp and circumstance, but expectations are low for any significant breakthroughs on trade or other issues.