Treasury yields rise as investors track widening Iran conflict

U.S. government bond yields moved higher on Monday, with the 10-year Treasury yield rising more than 1 basis point to 4.558%, according to CNBC market data. The move came as investors monitored escalating military activity in the Middle East and assessed recent U.S. data that pointed to softer inflation readings and resilient labor demand.

The 2-year Treasury yield, which CNBC noted is more closely tied to expectations for near-term Federal Reserve policy, was little changed at 4.181%. The 30-year Treasury bond yield increased by more than 1 basis point to about 5.08%.

A basis point is one-hundredth of a percentage point. Treasury yields move inversely to prices, so a rise in yields reflects lower prices for those securities. The 10-year note is a widely followed benchmark for U.S. government borrowing costs and influences financing conditions across global markets.

Middle East conflict remains in focus

U.S. Central Command said in a post on X that it completed a ninth consecutive night of strikes against Iran at 10 p.m. ET on Sunday. Centcom said the three-hour operation targeted Iranian military command centers, air defense and coastal surveillance sites, maritime capabilities, and missile and drone launch locations.

Centcom said the strikes were intended to reduce Tehran’s ability to attack commercial vessels and civilian mariners traveling through the Strait of Hormuz, a key maritime route linking the Gulf with global shipping lanes.

U.S. strikes have expanded in recent days, while Tehran has reported attacks on civilian infrastructure, CNBC reported. NBC News reported that the Bonji desalination plant was hit, cutting off water supplies to about 10,000 people.

Iran has retaliated with attacks on targets in neighboring countries, including Bahrain, Saudi Arabia and Jordan, according to CNBC. The Kuwaiti army said Monday on X that its air defense systems were intercepting “hostile” drone attacks from Iran.

Data tempers pressure on borrowing costs

Treasury yields had declined last week as investors reviewed economic releases showing that the U.S. economy continued to withstand inflation pressures linked to the Iran war, CNBC reported.

The fall in borrowing costs followed cooler-than-expected producer and consumer price data. U.S. jobless claims for the week ended July 11 also came in below forecasts at a seasonally adjusted 208,000, according to CNBC.

The next major U.S. data point on investors’ calendars is Friday’s S&P Global Flash U.S. PMI report. The index measures conditions in the U.S. manufacturing and services sectors and is watched for indications of momentum in the broader economy.

This story draws on original reporting from CNBC.