10-year Treasury yield climbs to a 24-year high amid relentless global bond sell-off

U.S. Treasury yields hit their highest level in more than two decades on Thursday as a global bond sell-off deepened. A September manufacturing survey in the U.S. showed a sharp gain in prices.

The 10-year Treasury yield breached a level last seen in April 2002, rising more than 3 basis points to 5.327%. The 10-year is a key benchmark for rates on mortgage and auto loans and credit card debt. The yield on the 30-year Treasury bond climbed almost 4 basis points, to 5.678%, also its highest in 24 years.

Yields and prices move inversely. One basis point equals 0.01%.

"Stocks are near records, but with government bond yields also at multidecade highs, there are questions about how long this rally can last. Some investors also expect higher interest rates to undo the decades-long 'there is no alternative' to stocks regime," Hardika Singh, economic strategist at Fundstrat, said in a Thursday note.

The U.S. manufacturing sector continued to expand in September while showing substantial pressure from higher prices, according to the Institute for Supply Management.

Within the monthly ISM manufacturing index survey, the prices index surged to 77.9, up 6.8 points, while backlogs jumped 4.6 points to 56.4.

Government borrowing costs around the world continued their relentless march upward on Thursday, continuing a months-long trend as investors voted with their feet over a lack of political will to tackle fiscal deficits, while inflation remains stubbornly above target and leading central banks move to push interest rates higher.

Bonds are increasingly moving in lockstep with oil prices, which have been turbulent as the U.S.-Israel war with Iran obstructed crude exports from the Middle East. Crude oil prices were higher on Thursday, with international benchmark Brent Crude back above $100 a barrel.

"We could see [bond] buyers come in effectively to take advantage of those yields, which would have the effect of causing them to go down, but also one of the things that has kept the volatility in those yields in the long end of the curve has been what's going on with oil, what's going on with inflation," Nomi Prins, founder of Prinsights Global, told CNBC's "Squawk Box Europe" on Thursday.

But sovereign wealth funds and central banks, among the main long-term holders of Treasury debt, are unlikely to go along, Prins said.

"We could see movement ... in Treasury yields going down if oil prices go down significantly, if there's a resolution" in the Middle East, Prins added.

— With additional reporting from CNBC's Jeff Cox