When the bond market calls the tune for stocks, it’s time for investors to proceed with caution. The 10-year Treasury yield, always closely watched, has now arguably become the most important metric for stock investors.

Yields on U.K. government debt rose to their highest levels for over 25 years and the British pound continued to sag against the dollar, as investors worry about increasing levels of government borrowing and a generally lackluster economy.

UK gilt yields hit multi-decade highs, with 10-year yields at 4.90% and 30-year at 5.40%. The pound slumped to a 14-month low. Analysts debate if this is a new "Truss moment" or temporary turbulence driven by inflation and fiscal worries.

Bonds flash caution, Apple's Indonesia trouble, Costco's strong Christmas, and more...

European shares dipped on Wednesday, as bond yields surged after investors priced in fewer interest rate cuts in Europe and the U.S. this year, while concerns about new tariffs under Donald Trump's presidency also weighed on sentiment.

European equities fell on Wednesday, pressured by rising bond yields and trepidation over how President-elect Donald Trump’s policies will impact global trade.