The recent events have caused significant volatility in the US markets. The sharp increase in long-term Treasury yields is a reflection of the unusual trading patterns following President Trump's tariff-driven "Liberation Day." After the imposition of reciprocal tariffs, the 10-year yield rose by 10 basis points to about 4.34% on Wednesday, marking a substantial 47 point swing from its low on Monday.

In a similar manner, the 30-year yield rose by 15 basis points on Wednesday, continuing its upward trend since March 2020. Prior to Wednesday, the 30-year yield stood at 4.89%. Mark Newton from Fundstrat Global Advisors expressed his view that the recent surge in Treasury yields may be short-lived, with no clear catalyst for a sustained increase.

While there is a possibility of yields rising in the coming weeks, Newton predicts a gradual decline in the 10-year yield to around 3.5% by fall. HSBC also maintains a 3.5% forecast for the 10-year yield, suggesting a potential further decline by year-end. Market expert Jim Bianco highlighted the significance of recent market movements but noted that it is challenging to determine the long-term market direction based on limited historical data.

Various theories have been put forward to explain the market behavior, including investors seeking liquidity in a volatile market and bond traders showing confidence in the US economy's ability to avoid a recession. Nancy Tengler from Laffer Tengler Investments emphasized that the bond market signals a lack of panic and a possible avoidance of recession, suggesting that market fluctuations are likely to persist.