Wall Street markets continued to decline on Tuesday following a broad selloff in government debt that pressured borrowing costs across the economy. The 10 year Treasury yield reached 5.27%, its highest level since 2007, while the 30 year yield climbed to 5.56%, a peak not seen since August 2003. This surge is driven by rising Brent crude prices, which approached $108 per barrel as hopes for a diplomatic resolution between the US and Iran over the Strait of Hormuz faded.

Goldman Sachs warned that relief in bond yields is now the clearest path for further equity growth, noting that homebuilders, utilities, and real estate have been the most affected by the rise. Market participants now price a 68% chance of a Federal Reserve rate hike in October to counter returning inflation fears. Investors are focused on the upcoming Personal Consumption Expenditures price index on Wednesday and Friday's payrolls report for further direction.