European equities drop as bond yields rise; FTSE 100 posts steepest decline

Mainland European benchmarks finished in negative territory at the close of trading. The sharpest sell-off was seen in the UK's FTSE 100, which gave up 1.14%, while Italy's FTSE MIB experienced a negligible decline. The German, French and Spanish benchmarks recorded losses between these two extremes, leaving sellers in command across the major bourses.

The closing tally showed:

• The German DAX closed at 25,864.63, a fall of 116.47 points (0.45%).

• France's CAC ended the session at 8,020.32, giving up 27.38 points (0.34%).

• The UK FTSE 100 settled at 10,638.43, dropping 122.91 points (1.14%).

• Spain's IBEX concluded at 18,807.20, off 150.60 points (0.79%).

• Italy's FTSE MIB finished at 49,941.82, down by a marginal 6.13 points (0.01%).

European yields move higher

European 10-year benchmark yields climbed universally. France recorded the biggest jump, adding 5.7 basis points to reach 4.956%, consolidating below the year's peak of 5.142%. UK and Italian yields both rose by 5.1 basis points. Spain posted a smaller advance of 1.9 basis points.

The rise in yields creates a fresh headwind for stock investors. In France, the conjunction of a falling equity market and the region's steepest yield climb places both asset classes under strain.

The benchmark 10-year yields showed:

• Germany: 3.335%, a rise of 4.0 basis points.

• France: 4.956%, higher by 5.7 basis points.

• UK: 5.248%, an increase of 5.1 basis points.

• Spain: 3.934%, adding 1.9 basis points.

• Italy: 4.467%, up 5.1 basis points.

U.S. stocks: Nasdaq buyers get their turn

Across the Atlantic, the equity picture is more divided. The Nasdaq benchmarks are spearheading a recovery, while the Dow Jones Industrial Average continues to trade at a discount.

The Nasdaq Composite and Nasdaq 100 both approached their 200-day moving averages in the prior session. Buyers have answered the call today, keeping those support levels dynamic as key risk metrics. The support held, providing the opening for buyers. Maintaining the bounce and breaking through overhead resistance stand as the subsequent hurdles.

At the time of the snapshot:

• Dow: 51,753.16, off 236.02 points, or 0.45%.

• S&P 500: 7,578.60, ahead by 37.20 points (0.49%).

• Nasdaq Composite: 25,417.11, up 252.80 points (1.00%).

• Russell 2000: 2,825.99, an increase of 20.11 points (0.72%).

• Nasdaq 100: 28,248.41, adding 258.59 points (0.92%).

U.S. data beat expectations

U.S. economic data came in ahead of consensus. The JOLTS report on job openings showed 7.52 million, exceeding the 7.15 million forecast and the previous tally of 7.19 million. The data indicates a greater number of vacancies than expected, though the count alone does not reveal the pace of hiring.

Factory orders climbed 1.8%, topping the 1.2% projection and the prior month's 0.3% gain.

Combined, the figures bolster the growth narrative. On the monetary policy front, the robust numbers provide less justification for expecting a softer Federal Reserve approach.

Treasury yields rise, led by longer maturities

U.S. Treasury yields are pushing higher as well, with the bulk of the gains concentrated at longer maturities.

The 2-year yield added 3.8 basis points to reach 4.621%. The 5-year rose 5.7 basis points to 4.750%, while the 10-year climbed 6.4 basis points to 4.958%. The 30-year bond yield settled 6.1 basis points higher at 5.330%.

The Nasdaq recovery continues to hold despite the climb in Treasury yields. Buyers carry the upside momentum for the session, even with elevated borrowing costs providing a persistent headwind.

Swiss inflation surprises to the upside

Elsewhere, Swiss CPI rose 0.2% on a monthly basis, defying expectations of no change and a flat prior reading. The positive surprise offers traders a firmer inflation figure to incorporate into the Swiss rate outlook.

France's public budget gap stood at €159.2 billion, a marginal improvement from the prior €159.6 billion. Across the Channel, the UK's 10-year gilt auction produced a yield of 5.27%, down from 5.42% previously, while the bid-to-cover ratio slipped to 3.4 from 3.6.