European stocks fell Wednesday, following a five-day rally that pushed the market to its highest level in more than two years. Bucking the trend, shares of banks tracked a rise in U.S. bond yields.

The S&P 500 and Nasdaq logged their first decline in 2018 as traders kept an eye on U.S. bonds following an accelerated rise in the yield on the 10-year Treasury note, prompted by a report that China is considering halting purchases of U.S. debt.

Stronger local currencies were giving investors a reason to sell equities across parts of the Asia-Pacific on Thursday, amid recent record and multiyear highs. This was most notable in New Zealand. The benchmark NZX-50 NZ50GR, -1.37% closed down 1.4%, recording its lowest finish in a month and biggest daily drop since March.