The U.S. Supreme Court left intact rulings that may force Argentina to pay billions of dollars to holders of repudiated bonds, rejecting the country's appeal in a case that has roiled financial markets and triggered threats of a new default.

Argentine dollar bonds plunged today after the justices turned away contentions that lower court rulings misread bond agreements and violated the country's sovereign immunity. Along with a high court ruling on another case related to the 2001 default, the rebuff is a victory for a Paul Singer-controlled hedge fund and other defaulted debt holders who have refused to accept the government's restructuring offer of about 30 cents on the dollar.

The rejection leaves Argentina facing a court order to pay the holdouts in full before it makes payments to bondholders who accepted restructuring terms after the 2001 default. The country could try to negotiate a settlement, a step it so far has refused to take. Argentina, seeking to preserve central bank reserves, says it can't afford to pay both sets of bondholders, fueling concern the country will default again.