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Global equities slid on Tuesday as talks over the U.S. debt ceiling continued without resolution, and yields on one-month U.S. Treasury bills hit a record high.

Rising yields and a stronger U.S. dollar pressured gold prices. Oil prices extended their rally.

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President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement on Monday on how to raise the U.S. government’s $31.4 trillion debt ceiling with just 10 days before a possible default.

However, both sides stressed the need to avoid default with a bipartisan deal and said they would continue to talk, leaving investors cautious about making large bets either way.

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“The best solution is to have a negotiated settlement that raises the debt limit,” said Samy Chaar, chief economist at Lombard Odier. Still, he added some investors were considering the market implications of “a compendium of less dramatic solutions, which may or may not be entirely legal, that might be used to avoid an actual default.”

The MSCI world equity index, which tracks shares in 49 nations, lost 0.38% by 10:47 a.m. EDT (1447 GMT).

The Dow Jones Industrial Average fell 10.75 points, or 0.03%, to 33,275.83, the S&P 500 lost 11.54 points, or 0.28%, to 4,181.09 and the Nasdaq Composite lost 25.56 points, or 0.20%, to 12,695.22.

The STOXX 600 index rose 0.39%. Activity data that showed euro zone business growth remained resilient, if a touch softer than expected.

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Europe’s broad FTSEurofirst 300 index fell 10.68 points, or 0.56%.

Julius Baer’s shares were down 7.39% after the Swiss wealth manager reported modest money inflows in the first four months, disappointing investors who had expected it to benefit from Credit Suisse’s troubles.

“Without real action on (the debt ceiling front), hawkish Fed speak has (had) some sway on markets,” Mizuho economist Vishnu Varathan said, adding that some pressure on U.S. Treasuries has also lent support to the dollar.

Minneapolis Federal Reserve President Neel Kashkari said on Monday that it was a “close call” as to whether he would vote to hike again or pause at next month’s meeting, and St. Louis Fed President James Bullard said another 50 basis points of hikes might be required.

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The comments caused traders to push back expectations for U.S. rate cuts from July towards November or December, sending ten-year and two-year U.S. yields to highs not seen since March.

The yield on benchmark 10-year Treasury notes rose to 3.7341% compared with Monday’s close of 3.719%. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, rose to 4.3823% compared from 4.322% previously.

Benchmark 10-year Treasury yields reached 3.7550% on Tuesday, their highest since 13 March, while two-year yields rose around 7 basis points to as much as 4.4040%, also their highest since March.

The U.S. dollar retreated after striking a six-month high of 138.91 yen.

“The (Bank of Japan’s) ongoing reluctance to tighten monetary policy further in the near-term combined with a recent adjustment higher in US rates has triggered renewed upward momentum for (the dollar versus the yen),” said MUFG senior currency analyst Lee Hardman in a morning note to clients.

The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 103.48.

Spot gold prices fell 0.09% to $1,966.59 an ounce, as the higher yields hurt demand for the non yielding precious metal.

Elsewhere in commodities, oil prices gained. Benchmark Brent crude futures climbed 1.18% to $76.89 per barrel and U.S. crude prices rose 1.4% to $73.05.

(Reporting by Tom Westbrook in Singapore, Kane Wu in Hong Kong, and Alun John in London Editing by Christina Fincher and Bernadette Baum)