Stock markets slid on Monday, extending last week’s sell-off Monday on fears of a regional conflict in the Middle East and worries that US interest rates will remain elevated for longer than initially thought. The concerns about US interest rates have also been affecting bond markets, with the yield on 10-year US government bonds rising above 5.0 percent for the first time since 2007 during the height of the subprime mortgage crisis. It stood at 5.02 percent in midday European trading according to Factset data. “The trajectory of US Treasuries is not merely a question; it is the only question for financial markets,” said Stephen Innes, managing partner at SPI Asset Management, in a note to clients. “US government bonds are the critical benchmark reference point against which virtually all other global assets are ultimately priced off,” he added. US Federal Reserve officials have indicated that interest rates may need to stay higher for longer than previously thought to push down persistent inflation as the US economy remains buoyant. “The rise in long-term yields is due in part to the resilience of the US economy and the fact the the Fed, even if it plays the prudence card, continues to emphasise the possible need of further tightening of monetary policy,” said Sebastian Paris Horvitz, director of research at LBP Asset Management. Innes said that investors have also been worrying about the substantial US federal deficit, the Fed’s withdrawal from the government and corporate debt markets, as well as selling pressure from China and other large holders of US government debt.