The benchmark S&P 500 slid 0.5% to end at 7,638.95 points, the tech-heavy NASDAQ Composite dropped 0.6% to settle at 26,253.34 points, and the blue-chip Dow Jones Industrial Average slipped 0.8% to close at 52,381.08 points

U.S. stocks on Wednesday ended in the red and government bonds sold off after a highly anticipated Treasury Department update on buyback operations disappointed investors. Sentiment had earlier already been under pressure from the world oil benchmark topping $100 a barrel for the first time in about three-and-a-half months.

There was also some caution a day ahead of U.S. inflation reports that could solidify bets for a central bank rate hike later this month.

The benchmark S&P 500 slid 0.5% to end at 7,638.95 points, the tech-heavy NASDAQ Composite dropped 0.6% to settle at 26,253.34 points, and the blue-chip Dow Jones Industrial Average slipped 0.8% to close at 52,381.08 points.

Treasury yields sharply gained as fixed-income traders dumped bonds after the Treasury Department said it would buy back up to $6 billion in 10-year to 20-year maturities, up from $2 billion previously.

The benchmark U.S. 10-year yield was last up 4.2 basis points to 4.846%. It had been up 1.2 basis points to 4.816% before the announcement. The shorter-end, more rate-sensitive 2-year yield was up 2.7 basis points to 4.425%.

The Treasury’s move had been seen as surprise intervention action to cap a surge in yields amid a sustained rout in government debt.

The bond market sell-off had been driven by a combination of factors including inflationary concerns due to soaring oil prices, jitters over the massive amount of debt being issued by companies to fund their artificial intelligence infrastructure buildouts, and worries over rising U.S. national debt.

Speaking of rates, the odds of the central bank delivering a quarter-point rate hike on September 16 remained elevated at about 60%, according to the CME FedWatch tool, after a blockbuster August jobs report last week led to a sharp recalibration in central bank monetary policy outlook.

All eyes are now on Thursday’s August producer price index (PPI) report and Friday’s consumer price index (CPI) data for further cues on rates. Hotter-than-anticipated readings could decisively tilt odds towards a central bank hike.