Borrowing costs climb from Washington to London

The bond market sets the tone

Wednesday belonged to the bond market. The Wall Street Journal reported that the US Treasury paid its highest borrowing costs since 2000. By the close, American shares had fallen as Treasury yields tested multidecade highs. The session had begun more gently, with yields retreating after a strong auction, although the Dow slipped even then.

Britain went further. This is Money reported that UK borrowing costs reached a new 28-year high in what it called a bond market rout. The same report carried a warning about the global economy from the head of the International Monetary Fund, put in three words: "Winter is coming." A day earlier the paper had described nervous investors leaving shares to take advantage of soaring bond yields ahead of the Budget.

France also drew comment. Alex Brummer, writing in This is Money, warned that France could spark the biggest bond market and euro crisis since Greece.

Not every market moved in step. According to the Journal, bond yields are surging around the world, but not in China. In India the central bank raised interest rates for the first time since 2023 as inflation risks built, CNBC reported. In America, a Federal Reserve survey put the one-year inflation outlook at its highest level since May 2023.

Shares, gold and cash

Higher yields made themselves felt elsewhere. The Journal reported that rising rates are eroding the value of even the most high-flying technology stocks. The usual reasoning runs that when government debt pays more, investors pay less today for profits expected many years ahead. Wednesday's fall in American shares came against that backdrop.

Gold found no shelter in the conditions. Futures fell on Wednesday on a stronger dollar and high yields, and the Journal's reporting in the early hours of Thursday had the metal lower again as higher yields and the firmer dollar continued to weigh.

In Tokyo the Nikkei fell 0.7 per cent on Thursday, dragged down by machinery makers and trading houses.

Cash, meanwhile, has gathered admirers. City A.M. reported that money market funds are surging in popularity as investors grapple with market volatility. In Asia, the South China Morning Post described investors turning to housing and real assets as global tension shakes confidence in markets. The same paper carried a bank's view that more global investors are eyeing Chinese equities, ending a four-year run in which they held less than their usual share. Separately, Hong Kong is reshaping a technology index to take in fast-growth companies, in a bid for better performance.

Companies and courts

Samsung supplied the largest number of the night. The BBC reported that the boom in artificial intelligence chips pushed the company's profits to a record $80bn. Shell, for its part, told the market it expects its refineries to almost double the profit made on every barrel of fuel, according to the Guardian.

In British utilities, the owner of South West Water asked investors for £550m to fix its infrastructure, days after being handed a record fine for sewage spills. Nils Pratley, in his Guardian column, addressed Burnham directly: water shareholders have their uses, he wrote, because they can be squeezed for cash.

Elsewhere the news was harder going. Lotus is halving its UK workforce after Trump tariffs hit sports car sales. Asos shares tumbled after a cyber hack, and This is Money questioned what the incident means for the fashion firm's recovery. Shein's UK revenue reached £2.5bn despite troubles with its stock market listing, City A.M. reported. The Virgin Media O2 boss criticised Lisa Nandy for backing BT's £400m takeover of TalkTalk. In America, Paramount completed its $81bn takeover of Warner Bros Discovery, and Ripple, the crypto payments company, has broken into Wall Street, the Journal reported.

In the courts, former Barclays traders jailed for rigging interest rates have had their convictions quashed, as both the Guardian and the BBC reported. The Bank of England, meanwhile, revealed the animals that will replace Churchill and other historical figures on its banknotes. The puffin is among them. The kingfisher is not.