Stocks and bonds retreated before a key US inflation reading this week and under a wave of heavy government and corporate debt supply.

US stock futures dropped with Europe’s Stoxx 600 benchmark as investors shrugged off tech-led gains that rolled across global markets. Shares and bonds of Spanish blood plasma firm Grifols SA tumbled after short seller Gotham City Research LLC published a report criticizing the company’s financial reporting.

As Monday’s bounce proves short-lived, investors are back to worrying about risks from inflation to bond volatility as a tsunami of corporate and government debt washes over the market.

BlackRock Inc. issued a warning about the dangers of debt-fueled government spending in an election year as government bonds slumped under supply from countries including the UK, Italy and Belgium. Long-dated Gilts led losses after the government sold 2.25 billion pounds ($2.9 billion) of 20-year debt.

“The new year is already putting the 2023 Santa rally to the test,” said Evelyne Gomez-Liechti, a strategist at Mizuho International, citing pressures including unexpected US labor strength, an overextended rally and heavy supply of new government and corporate debt. At the same time, US 10-year yields are unlikely to breach last week’s highs before the release of the US inflation report on Thursday, she said.

The US benchmark 10-year yield held above 4%, a level former bond king Bill Gross called “overvalued” even after it surged 17 basis points last week as robust labor-market data spurred traders to pare bets on rapid Fed easing.