Global bond markets stabilized after a sharp sell-off that drove US borrowing costs to their highest level since 2002. The yield on the 10-year US Treasury note reached 5.34% before leveling off at 5.24%. The sell-off affected global markets, with UK gilt yields surpassing 6% and Japanese, French, and German bonds facing pressure. Investors remain cautious about potential spikes in yields and their impact on financial conditions.

Bond traders are bracing for more Federal Reserve interest-rate increases, even as the US Labor Department's September employment report is expected to show a slowdown in job growth. The report is expected to show a gain of 90,000 jobs, down from 162,000 in August, but still in line with this year's average.

Speaking at SIFMA's Global Tax Reporting Symposium, Kevin Salinger, Treasury's acting assistant secretary for tax policy, cautioned investors against ramping up aggressive tax-reducing strategies before potential restrictions take effect. Treasury has identified transactions involving swaps, foreign currency and exchange-traded funds as potentially abusive and indicated future rules could apply retroactively.