Government bond prices sustained a further blow on Thursday, prompting benchmark stocks to wipe out close to all gains for the year, after comments from Federal Reserve chairman Jay Powell failed to reassure investors.

With prices falling, the yield on the 10-year US Treasury note climbed to 1.53 per cent, up 0.05 percentage points from the previous day and continuing a sharp rise that has spread to debt issued by other nations.

In stocks, the benchmark S&P 500 index extended recent losses, briefly wiping out its gains for the year with a fall of as much as 1.7 per cent. The index later clawed back some of its losses, and closed down 1.3 per cent. The technology-focused Nasdaq Composite finished 2.1 per cent lower, turning negative for the year.