U.S. Treasury bond yields rose sharply on Wednesday, with the 10-year Treasury yield reaching 5.08%, the highest since June 2007. The 30-year Treasury yield also climbed to 5.38%, the highest level since before the global financial crisis nearly 20 years ago. These increases reflect growing concerns about inflation, which is often linked to rising oil prices. European Brent crude oil reached over $101 per barrel, while U.S. crude oil approached $92 per barrel, both showing significant increases in recent weeks. Earlier in the week, President Donald Trump mentioned that U.S. officials were in discussions with Iranian representatives at the U.N. General Assembly, which briefly eased concerns about rising oil prices and offered some hope for an end to the ongoing Iran-related tensions. However, optimism faded quickly after U.S. special envoy Steve Witkoff described the talks as “lengthy” and noted that more work remained. The discussions, which have been ongoing for months, have yet to produce a resolution. On Wednesday, a cargo ship was struck by an unknown projectile in the Strait of Hormuz, a vital waterway for global oil shipments. This incident added to the ongoing tensions in the region, which have kept oil flows at a near standstill for months. Trump also raised the issue of energy prices, supporting a ban on U.S. exports of diesel fuel. He told reporters at the U.N. that he had urged his administration to consider such a ban. However, industry experts warned that a diesel export ban could lead to higher prices and economic damage. The American Petroleum Institute said the move could reduce refinery activity and raise U.S. prices, while Energy Secretary Chris Wright called the idea ineffective. Benchmark diesel futures in Europe rose as much as 7% following Trump’s comments. New economic data also contributed to the rise in Treasury yields. According to S&P Global, U.S. business activity growth accelerated for the fourth consecutive month in September, reaching the fastest pace in over five years. Input costs for businesses also rose sharply, driven in part by higher oil and transportation prices. These trends are expected to increase inflation and selling prices in the coming months. The surge in yields and oil prices led to a decline in stock markets, with the Nasdaq Composite index dropping 1% and the S&P 500 falling 0.6%. The Dow Jones Industrial Average also fell, with sectors sensitive to inflation, such as travel and large technology companies, seeing the biggest declines. The S&P utilities sector, which includes companies building data centers for artificial intelligence, was the hardest hit. Higher interest rates could significantly increase the cost of building AI infrastructure. Consumer discretionary and real estate sectors also experienced notable losses. Meanwhile, the average rate for a 30-year fixed mortgage rose to 7.17%, according to recent reports.