The bond market sell-off leads to higher yields, which result in increased interest rates for consumer loans such as mortgages and credit cards, making borrowing more expensive.

The volatility in U.S. stocks was triggered by escalating trade tensions, particularly with China, where tariffs on Chinese imports were increased beyond initial expectations, further complicating economic forecasts.

The rise in bond yields benefits investors by offering higher returns but poses risks to financial institutions, as higher borrowing costs can complicate debt repayment and reduce the value of existing bond holdings.

Trump's tariff policies have increased uncertainty and could negatively impact U.S. economic growth by raising costs for consumers and businesses, despite a temporary pause in some tariffs.