Wall Street's major indexes fell on Wednesday, stalling the rally that marked the start of 2018, after a report that China is considering slowing its purchases of US government debt.
"We've had a tremendous run, mostly unabated since Trump's election in 2016 and with no volatility. If we do see a pullback, that's going to be a buying opportunity," said Michael Scanlon, managing director of Manulife Asset Management.
The S&P and the Nasdaq have closed at record highs on all days in 2018, on optimism over global growth and expectations of a strong quarterly earnings.
After spiking as high as 2.59 per cent, the yield on the US 10-year note was flat at 2.55 per cent in recent trade, according to Bloomberg data. That said, the yield has been rising, reflecting the passage of US tax cuts and continuing upward momentum in the US economy.In European trading, a rise in banks and oil stocks boosted the UK's top share index to a fresh record on Wednesday as climbing bond yields supported financials across Europe.
Britain's blue chip FTSE 100 index was up 0.2 per cent at 7748.51 points, a new closing record and outperforming the broader European market, while mid-caps declined 0.6 per cent.
British banks joined in a rally with European peers as bond yields rose. The gains in financials added 37 points to the FTSE.
"When there's movement in the bond yields, the UK banks do benefit from that in a number of ways. Firstly, they make higher revenues in terms of their returns," John Moore, trader at Berkeley Capital, said.