U.S. Treasuries sold off as investors rotated into equities and corporate bonds, eroding the hedging bid for government debt ahead of this week's auction calendar.
The Nasdaq Composite rose 2.6 percent to 25,220, while the S&P 500 gained 2.3 percent to 7,544. The Dow Jones Industrial Average climbed 2.1 percent to 52,338. The broad rally pulled capital from the relative safety of Treasuries into investment-grade and high-yield corporate issuances.
The repricing reflects duration compression at a critical moment: when new supply hits the market, Treasury yields typically adjust higher if risk appetite remains strong. Bond traders view pre-auction demand destruction as a warning signal for auction execution, particularly in longer-dated maturities where duration risk is highest. If corporate spreads remain tight and equity momentum holds, incoming government debt will need higher yields to clear.
