Chelsey Dulaney and Sam Goldfarb

The 10-year U.S. Treasury yield briefly broke above 5% as widening instability in the Middle East pushed up oil prices, deepening investor concerns about inflation.

The yield on the benchmark bond hit 5.012% in morning trading, according to Tradeweb, its highest intraday level since 2007. It then fell back to about 4.96% as bond buyers were drawn in by higher yields and oil prices ticked a bit lower off their highs.

The 10-year yield, which helps set borrowing costs for consumers and businesses, has only topped 5% on one other occasion since 2007. Investors have been selling government bonds for weeks as oil prices climb. Brent crude approached $110 a barrel after drone attacks led Saudi Arabia to shut down a key oil pipeline, a move likely to squeeze global oil supply.

With inflation on the rise, the Federal Reserve is on Wednesday expected to raise interest rates for the first time this year.

In stocks, some tech names and industrial shares sold off after leaders of three of the biggest AI companies called for development of the technology to be slowed down.

The Nasdaq pared early losses, down about 0.1% in midday trading amid concerns that demand for AI services and inputs like memory chips could come under pressure. Chip stocks fell around 5%. The Dow was down 0.2%.