The 10-year Treasury - the reference point for mortgages and credit cards - inched up to 4.768%, a 1 basis point increase, after briefly matching a high last seen on Jan. 14, 2025. The 30-year yield eased slightly to around 5.245%, while the 2-year added a bit over a basis point to 4.369%.
Across the curve, price quotes showed the U.S. 1 Month at 3.757% (+0.002), the 3 Month at 3.869% (+0.005), the 6 Month at 4.026% (+0.008), the 1 Year at 4.141% (-0.003), the 10 Year at 4.768% (+0.01), and the 30 Year near 5.244% (-0.005). A quick refresher: a basis point is one one-hundredth of a percentage point, and when bond prices fall, yields rise - and vice versa.
Borrowing costs crept to intraday highs as traders parsed fresh Middle East headlines. U.S. forces conducted new strikes targeting Iran, and a tanker was hit by unidentified projectiles just off Oman along the Strait of Hormuz. That escalation pushed crude higher, with West Texas Intermediate up roughly 3% to a touch above $88 a barrel and Brent moving more than 2% past $92.
In a Tuesday note, Ulrike Hoffmann-Burchardi, UBS's chief investment officer for the Americas and the firm's worldwide equities leader, wrote, "With no clear path to reopening the Strait after six months of war, inflation worries remain elevated. Uncertainty over the Federal Reserve's policy outlook, fiscal concerns, and rising AI-related debt issuance have all kept bonds under pressure," and added, "Yield volatility is likely to persist in the near term."
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Investors are also watching as G20 finance ministers convene in Asheville, North Carolina, with the gathering due to conclude later Tuesday, along with a packed data calendar ahead of Friday's nonfarm payrolls. The ISM Manufacturing Index for August slipped 1 point from July to 54.6, a notch below the 55.3 economists polled by Dow Jones expected, and July job openings landed roughly in line with forecasts.
All of this rolls up to a simple takeaway for your wallet: oil-driven inflation jitters and policy uncertainty are keeping bond markets jumpy, which can ripple into mortgage rates and other borrowing costs.