NEW YORK — The 10-year Treasury yield climbed to 4.9 percent on Thursday, its highest level since November 2023, as wholesale inflation data and crude oil prices exceeding $100 a barrel drove a broad sell-off in long-dated debt.

Bond prices fell as yields rose, despite the Treasury Department's announcement to buy back up to $6 billion of long-term debt.

Luis Alvarado, co-head of global fixed-income strategy at Wells Fargo Investment Institute, said the market is receiving a "wake-up call" that fundamental issues driving rates higher remain unaddressed. He cited expected nominal economic growth in the third and fourth quarters and persistent inflation tied to geopolitical conflict, adding that he sees a bias for rates to continue rising.

Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research, identified 5 percent on the 10-year as a psychological level that could attract new buyers who have not yet extended duration. Martin recommended staying below the duration of the Bloomberg U.S. Aggregate Bond Index, which is less than six years. He noted that yields remain near the high end of their 16- to 17-year trading range, positioning current levels as attractive entry points.

JoAnne Bianco, senior investment strategist at BondBloxx, projected the 10-year yield could exceed 5 percent during continued volatility, with oil prices and geopolitical tensions as key drivers. Bianco advised investors to focus on shorter or intermediate portions of the yield curve, where less price sensitivity to rate swings offers protection. She cited BBB-rated corporate bonds, high-yield debt and emerging market securities as tactical options.

Alvarado recommended against selling existing longer-dated Treasurys, instead directing new capital into Treasury bills.

The sell-off is sharpening debate over whether the bond market has capacity to absorb higher borrowing costs. A 5 percent Treasury yield would increasingly compete with corporate debt for investor capital—a dynamic with direct implications for the financing of the artificial intelligence investment boom, which relies heavily on debt issuance. Economists at TS Lombard argue the 10-year yield "should be at least 5 percent" in the current environment, warning that equities will face sustained headwinds.