On the first day of trading in 2026, the sudden plunge in the U.S. bond market seemed abrupt, but in fact, there were signals beforehand. The real behind-the-scenes driver is not geopolitical tensions or policy changes, but rather a surprisingly strong employment report.

Last week, initial jobless claims in the U.S. dropped to their lowest level of the year. Once this data was released, global bond markets reacted sharply and instantly. Why such sensitivity? It’s simple—initial jobless claims directly reflect companies’ willingness to lay off workers. The lower the number, the lighter the pressure to cut jobs, indicating that the labor market’s supply and demand remain tight. Employment stability is actually increasing. Market data shows that this week’s claims not only beat expectations but also continued to decline from the previous week, fully demonstrating that the resilience of U.S. employment is much stronger than some pessimists think.

Employment stability directly correlates with economic growth. With more job opportunities and stable wage expectations, consumers’ desire to spend is stimulated. Consumption is the engine of the U.S. economy. Once it starts running, the market’s expectations for U.S. economic growth will be significantly upgraded. Risk appetite surges accordingly, and demand for safe assets like government bonds naturally declines.

From an asset pricing perspective, bond prices and yields move inversely—less demand means more selling pressure, and bond prices must fall. To attract investors to buy, yields need to rise, providing higher compensation to balance the risk. Therefore, the upward movement in the 30-year and 10-year U.S. Treasury yields is essentially the market re-pricing itself.