Stock markets have paused as bond yields steadied just below multi-year highs amid war-driven inflation fears, though yields remain high enough to cloud the outlook for Nvidia's looming results.
The benchmark 10-year US Treasury yield hit a 16-month high of 4.687 per cent on Wednesday, while the 30-year yield climbed to 5.198 per cent, levels last seen in 2007.
Both have since eased slightly to 4.65 per cent and 5.17 per cent, respectively.
Longer-dated bonds have also sold off in Europe and Japan, pushing yields close to multi-year highs as investors brace for higher energy prices - driven by the effective closure of the Strait of Hormuz - to feed into broader inflation and force central banks to raise interest rates.
Yields edged lower on Wednesday.
Germany's 10-year yield, the euro zone benchmark, fell two basis points to 3.17 per cent, down from Tuesday's 15-year high, offering some support to European shares, up 0.2 per cent.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 per cent, down for a fourth straight session, while US stocks also slid.
Futures pointed to modest US gains later in the day.
Mohit Kumar, chief European economist at Jefferies, said they had advised clients to avoid longer-dated bonds "as the current oil price shock leads to higher inflation and higher deficits".
"Even if we stay in this 'No War No Peace' scenario for an extended period, it would have a negative impact on oil prices and inflation.
"We should also see government support for fuel subsidies and an increase in unemployment benefits as the oil shock reduces economic activity."
"Higher rates should also start feeding into risky assets," he said, using a term that typically refers to stocks and other asset classes such as corporate credit.
There were tentative signs of easing pressure from the Gulf on Wednesday, as two Chinese oil tankers exited the Strait of Hormuz, shipping data showed, following positive comments from the US president and his deputy.
Brent futures fell two per cent.
Hopes that more ships could pass through the key strait, however, have been dashed before.
In Beijing, less than a week after US President Donald Trump's high-profile visit, Chinese leader Xi Jinping held talks with Russian President Vladimir Putin, saying it was imperative to stop the war in the Middle East.
It is a pivotal day for chipmakers, with Nvidia due to report first-quarter earnings after the close.
Expectations remain high, with revenue forecast to jump nearly 80 per cent to about $US79 billion, according to the median estimate in an LSEG survey of analysts.
The global backdrop is also more complex.
A Samsung Electronics union said it would go ahead with an 18-day strike from Thursday, threatening semiconductor supply.
Samsung shares fell as much as 4.4 per cent before closing broadly flat.
They remain up 130 per cent in 2026, one of the standout performers in a massive rally in global chip stocks that has supported wider equity markets.
In currency markets, the dollar hovered near a six-week high against a basket of major peers.
It was steady at 150.02 yen, $US1.1592 per euro and $US1.3387 to the pound.
Sterling barely reacted to cooler-than-expected British inflation data, though traders pared back bets on imminent Bank of England rate hikes, sending two-year gilt yields down 10 basis points.
Spot gold was steady at $US4,487 per ounce, about a six-week low.
