Bonds are getting crushed again and stock futures are higher

The selloff in bonds continues on Wednesday morning, and futures are rallying after stocks closed flat on Tuesday.

Near 8:00 a.m. ET, Dow futures were up 56 points, S&P 500 futures were up 7 points, and Nasdaq futures were up 16 points.

Treasuries are selling off again, and the 10-year note yield is creeping towards 2.5%. It has climbed to around 2.493%, higher than the eight-month peak it reached on Tuesday.

Bloomberg reported that PIMCO's Total Return Fund slashed its holdings of government bonds by two thirds in May, right before the selloff we've seen this month.

Overnight, the German 10-year bund yield crossed 1% for the first time since September. This is just weeks after the yield plunged to as low as 0.05% and there were concerns that German yields would also turn negative all the way out to 10 years.

Crude oil is rallying again. West Texas Intermediate crude oil rose by more than 2% and crossed $61 per barrel, after crossing $60 on Tuesday. Brent crude, the international benchmark, was up by more than 1% at around $66 per barrel.

On Tuesday, the Energy Information Administration's monthly short-term outlook forecast that US oil output will "generally decline" from 9.6 million barrels per day in May until early 2016.

Later this morning, the EIA will release data on US crude oil inventories.

In company news, Target announced it is doubling its buyback program and raising its dividend; on Tuesday, it accidentally published the news and removed the information minutes later.