Treasury Shockwave Deepens: 30Y Yield Hits 16-Year High, Stocks Slide for Third Straight Session

Market Overview

U.S. equities extended losses for a third consecutive session as long-duration Treasury yields surged, with the 30-year Treasury yield approaching 5.20%, its highest level since 2007. The sharp selloff in bonds reignited concerns over tightening financial conditions and valuation pressure across risk assets. Precious metals also remained under heavy pressure, with silver tumbling 2.9% in a single session.

Meanwhile, Washington and Beijing officially launched intergovernmental AI dialogue talks, signaling a new phase of competition shifting toward governance and regulatory coordination. On the corporate front, Google unveiled major AI upgrades at its I/O conference, while two of Chinas largest memory-chip companies moved forward with IPO plans, reinforcing expectations that the semiconductor upcycle could extend into 2027.

30-Year Treasury Yield Nears 5.20%, Highest Since 2007

The U.S. 30-year Treasury yield climbed above 5.18%, approaching the psychologically critical 5.20% threshold and marking its highest level in nearly 16 years. According to market surveys, 62% of respondents now expect the yield to surpass 6% before year-end, the most bearish long-bond outlook since 1999.

Systematic funds, asset managers, and Japanese investors have all accelerated their retreat from long-duration Treasuries, intensifying pressure on the bond market. Concerns are also rising that potential Japanese FX intervention could reach as much as $100 billion, implying an estimated $40 billion to $50 billion in Treasury liquidation.

At the same time, positioning in U.S. equities remains historically crowded. Bank of America‘s latest fund manager survey showed equity overweight exposure reaching a record 50%, nearing levels that previously triggered the firm’s well-known “sell signal.”

Aluminum Market Enters Potential Supercycle

The aluminum market is increasingly being viewed as the next major commodity supercycle candidate. More than 3 million tons of production capacity have reportedly been permanently shut down due to escalating Middle East tensions, while global aluminum inventories have fallen to their lowest level in 55 years.

Both Citigroup and JPMorgan Chase forecast aluminum prices could surpass $4,000 per metric ton within the next three months.

Demand-side momentum remains equally strong. EV penetration rates have climbed above 60%, while solar and energy storage installations continue accelerating globally. As a result, the worldwide aluminum supply-demand deficit is projected to widen toward 2 million tons.

Geopolitical risks also remain elevated. NATO is reportedly considering escort operations near the Strait of Hormuz if shipping routes are not fully restored before July, potentially increasing military involvement to protect commercial vessels.

Key Themes AheadNVIDIA Earnings Take Center Stage

NVIDIA is set to release quarterly earnings this Wednesday, with the options market signaling exceptionally bullish positioning ahead of the report. Investors remain heavily focused on July guidance, AI infrastructure demand, and hyperscaler spending trends.

With the launch of U.S.-China AI dialogue, Google I/O announcements, and the Alibaba Cloud Summit all occurring in the same week, markets may finally receive clearer direction on the next phase of the AI trade.

Bond Market Turbulence Intensifies

The rise in U.S. and Japanese 30-year yields above 5% suggests that global long-duration bond pricing mechanisms may be undergoing structural repricing.

Between potential Japanese intervention, CTA deleveraging, and extreme equity positioning nearing historical sell thresholds, markets now face a highly fragile macro backdrop. This week‘s Fed minutes, China’s LPR decision, and upcoming CPI releases could become key catalysts shaping the next phase of global risk appetite.

Key Events to Watch (GMT+8)

• China announces latest LPR decision today

• NVIDIA Q1 earnings release tonight, with options markets pricing in extreme bullish expectations

• Federal Reserve meeting minutes released today

• Eurozone and UK April CPI data due today

• U.S. EIA crude inventory data later this week

• 5/20 Alibaba Cloud Summit expected to feature a “major new partner” appearance