Traders work on the floor of the New York Stock Exchange (NYSE) on March 2, 2026 in New York City, USA.
Brendan McDiarmid | Reuters
U.S. Treasury yields rose on Tuesday after oil prices rose for the second day in a row due to the U.S.-Iran conflict.
The benchmark 10-year Treasury yield rose about 4 basis points to 4.09%. The yield on the 30-year Treasury note rose more than 2 basis points to 4.723%. The yield on two-year government bonds rose more than 4 basis points to 3.531%.
One basis point equals 0.01%, and the yield is inversely proportional to the price.
The war between the United States and Iran is intensifying into its fourth day, with the US embassy in Riyadh attacked on Tuesday and President Donald Trump warning that the conflict could last much longer than the four weeks he initially expected.
Israel said Tehran-backed Hezbollah launched missiles and drones toward Tel Aviv, then attacked Iran and Lebanon simultaneously.
usa crude oil Prices topped $76 per barrel on Tuesday, marking the second consecutive day of increases. brent crude oilIt surpassed the international benchmark of $83 per barrel.
Traders are worried that rising energy prices will spill over into the economy, pushing prices higher as investors hope inflation will ease enough to spur the Federal Reserve to cut interest rates again this year.
While the stock market is firmly in risk-off mode, the bond market is also seeing some puzzling reactions. Typically, during geopolitical conflicts, bond prices rise and yields fall as investors seek safety in the government bond market. However, as investors feared the impact of energy prices on inflation, the opposite occurred: prices fell and yields rose.
Concerns about energy supply disruptions have increased and oil prices have risen after Iran reportedly closed the Strait of Hormuz and threatened to open fire on ships attempting to cross the strategic chokepoint.
On the economic front, Monday’s ISM Manufacturing Business Index pointed to increasing price pressures at the factory level.
While the overall index fell slightly to 52.4, the price paid component increased by 11.5 points to 70.5, indicating the percentage of companies whose prices increased in February. This marks the highest level since June 2022 and follows a much stronger-than-expected rise in the producer price index in January.
—CNBC’s Jeff Cox contributed reporting
