Treasuries Climb Well Off Worst Levels But Still Close Slightly Lower

(RTTNews) - After initially extending yesterday's slump, treasuries regained ground over the course of the trading session on Tuesday.

Bond prices climbed well off their worst levels of the day but still closed lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by nearly a basis point to 4.056 percent after reaching a high of 4.117 percent.

With the uptick, the ten-year yield added to the 8.6 basis point surge seen on Monday, climbing further off the four-month closing low set last Friday.

The early weakness among treasuries came as a continued surge by the price of crude oil added to concerns about inflation and the outlook for interest rates.

Contributing to the extended surge by oil prices, Iran said it has closed the Strait of Hormuz in retaliation for the U.S. and Israeli attacks and threatened to fire on any ship trying to pass through the vital waterway.

Supply concerns were also worsened by the attacks on several oil refineries, including Saudi Aramco's oil facility in Ras Tanura.

As the conflict entered its fourth day, U.S. President Donald Trump suggested the war may last four to five weeks but could "go far longer than that."

Secretary of Defense Pete Hegseth also offered few details about the duration of the operation against Iran but claimed it will not be "endless," framing the conflict as a "generational" chance to reshape the Middle East.

Selling pressure waned over the course of the session, however, leading some traders to pick up bonds at reduced levels due to their safe haven appeal.

Reports on private sector employment and service sector activity are likely to attract attention on Wednesday, although the spotlight may remain on the latest developments in the Middle East.