Bitcoin Hits Record High as US Bond Yields Surge

Bitcoin climbed to a fresh record above $110,000, rising nearly 50% from its April low, as sentiment shifted towards digital assets amid US fiscal concerns. The US bond market remained under pressure, with 30-year Treasury yields holding above 5% following a weak auction and as President Trump's $3.8 trillion tax-and-spend bill advanced in Congress. The German DAX index closed at a record high, outperforming global peers, which are mostly still below prior record highs.

Equities

The FTSE 100 was broadly unchanged on Wednesday, closing with a modest gain of 0.06%, while the more domestically focused FTSE 250 fell 0.7%. Investors reacted to a sharper-than-expected rise in UK inflation for April, which has reduced the likelihood of a near-term interest rate cut from the Bank of England. Markets now place a 40% chance on a cut in August, down from 60% earlier in the week.

JD Sports dropped 10.6% after warning that US tariffs under President Donald Trump’s administration could push it to raise prices in key markets. SSE declined 2.4% after the energy group announced a 15% cut to its five-year investment plans. On a stronger note, Fresnillo rose 4.2% as gold prices climbed for a third consecutive session, lifting the broader precious metals sector. Severn Trent gained 2.3% after forecasting a doubling in adjusted earnings per share between 2025 and 2028, helping limit wider losses in the index.

In the US, major indices fell sharply. The Dow Jones dropped 1.91%, or 816.80 points, closing at 41,860.44. The S&P 500 lost 1.61%, while the Nasdaq slipped 1.41%. The decline followed concerns over a potential increase of up to $5 trillion in federal debt if Congress backs President Trump’s proposed tax-cut bill. Longer-dated Treasury yields rose sharply, with weak demand at a 20-year bond auction pushing the 10-year yield to its highest level since February.

Target fell 5.2% after the retailer cut its annual sales forecast, citing weaker demand for discretionary goods. UnitedHealth Group dropped nearly 6% following a report alleging it paid bonuses to nursing homes to limit hospital transfers. Wolfspeed tumbled nearly 60% on reports that the semiconductor firm is preparing to file for bankruptcy.

Forex & Commodities

The US dollar slipped to a two-week low against the Japanese yen, trading at 143.15, down 0.4% on the day. Investors reacted to ongoing concerns over US fiscal policy, particularly as President Trump’s tax-cut and spending bill advanced through a key House committee.

The bill is forecast to add $3.8 trillion to the federal debt over the next decade. A weak 20-year Treasury bond auction and last week’s credit rating downgrade from Moody’s further weighed on sentiment. The dollar index hovered near recent lows, while the Swiss franc and euro each rose 0.1%. Sterling edged up 0.1% to $1.3431 on Thursday morning.

Gold climbed 0.7% to $3,336.43 an ounce, its highest since 9 May, supported by the weaker dollar and ongoing uncertainty around US fiscal risks. Silver rose nearly 1% to $33.66 an ounce. Analysts suggested gold may target new highs between $3,450 and $3,500 if current momentum continues.

Bitcoin rose 3.3% to a fresh record of $111,862 as investors continued to move capital into alternative assets. The move was seen as a hedge against inflation and fiscal instability in the US, according to analysts.

Brent crude was little changed, up 4 cents at $64.95 per barrel, while US West Texas Intermediate added 10 cents to $61.67. A surprise build in US crude inventories, which rose by 1.3 million barrels last week, capped gains. The build followed a rise in imports and a drop in demand for gasoline and distillates.

Investors are also watching the upcoming US-Iran nuclear talks, scheduled for 23 May in Rome, as well as reports that Israel may be preparing to strike Iranian nuclear facilities.