Treasury Yields Jump as Oil Surges on Iran Tensions
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- Treasury yields rose across the curve Tuesday — the 10-year gained 3 basis points to 4.7334%, the 30-year jumped more than 3 basis points to 5.2790%, and the 2-year added more than 2 basis points to 4.2597%.
- Oil futures climbed following Trump's comments on the Strait of Hormuz, with West Texas Intermediate up 1.78% to $83.58 and Brent crude rising 1.81% to $89.25 per barrel in early trade.
- Trump responded to Iranian reparations demands by saying Tehran itself must pay the U.S. compensation for the war, and separately claimed the U.S. now has control of the Strait of Hormuz.
- Hopes of a Middle East deal faded this week, feeding the bond selloff; the 30-year yield — typically more sensitive to geopolitical events — led the move higher.
- Traders are positioned for Wednesday's core monthly and yearly inflation print for July, while existing home sales data due later Tuesday is expected at 4.04 million, down slightly from June's 4.09 million.
- Monday's session already closed with yields higher, with both the 10-year and 30-year up 4 basis points, setting up Tuesday's continued move.
Why it matters: With the 30-year yield at 5.28% — a level that directly drives mortgage, auto, and credit card rates — American borrowers face renewed pressure just as home sales are projected to slip to 4.04 million from 4.09 million. Trump's compensation demands against Iran undercut the very deal that markets had been pricing as an oil-price relief valve, keeping energy-driven inflation risks front and center heading into Wednesday's CPI print.
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