On Wednesday, US stocks and bonds fell as traders weighed the possibility of a US recession caused by either a US debt default or higher interest rates from the Federal Reserve.
The S&P 500 fell 0.7%, led by losses in financials and real estate, as talks over the US debt ceiling continued into the next day and Federal Reserve minutes revealed policymakers divided on the path for US interest rates.
The losses came as stocks in Europe and Asia fell earlier in the day. The Stoxx 600 fell the most in two months as UK inflation rose faster than expected. In Asia, China's benchmark CSI 300 lost all of its year's gains as developers' debt woes and a new wave of Covid exacerbated growth concerns.
Short-term Treasury yields have continued to rise, as investors demand a higher premium for US debt with the highest default risk. Treasury Secretary Janet Yellen predicted that the United States would begin missing debt payments as early as June 1. As a result, the yield on securities maturing on June 6 surpassed 6.6% on Wednesday, while those maturing on May 30 yielded around 3%.