Seagulls settle on poles as boats navigate the sea on April 28, 2026 on Qeshm Island, Iran in the Strait of Hormuz.
Asghar Besharati | Getty Images
U.S. Treasury yields moved higher Monday as investors weighed the implications of more costly energy prices as a result of the Iran war and awaited the latest updates on the state of the domestic job market later this week.
The 2-year Treasury yield moved up more than 4 basis points to 3.933%, while the benchmark 10-year note gained 4 basis points to 4.418%.
One basis point equals 0.01 percentage point, and yields and prices move in opposite directions.
Fixed income yields rose following conflicting claims out of the Strait of Hormuz at the entrance to the Persian Gulf, through which 20% of the world’s crude oil flowed before the war began in late February. Iranian state media claimed the Islamic Republic hit a U.S. warship in the area, but the U.S. Central Command later denied the report.
Stocks slipped off, but were off their lows, while oil prices climbed but remained below earlier highs. U.S. West Texas Intermediate crude futures were last up marginally to trade above $102 per barrel. International Brent crude was up 2% to above $110.
Bond traders are also awaiting data later in this week that will provide more clues on the muddy U.S. jobs picture.
April nonfarm payrolls are set for release by the Bureau of Labor Statistics on Friday, with economists surveyed by Dow Jones expecting a gain of just 53,000 following the 178,000 jobs added in March. The unemployment rate is expected to hold steady at 4.3%.
Markets have been weighing how the Federal Reserve will react to an economic picture that includes inflation staying above the central bank’s 2% target for several years, and mixed messages as to the state of U.S. employment.
The rate-setting Federal Open Market Committee next meets June 16-17, and interest rate futures traders are nearly unanimous in pricing in no change to the Fed’s 3.50% to 3.75% overnight fed funds rate, based on the CME Group’s Fedwatch tool. Last week’s final FOMC meeting under outgoing chair Jerome Powell, as well as subsequent statements from three officials, expressed misgivings about the direction of monetary policy.
Regional presidents Neel Kashkari of Minneapolis, Lorie Logan of Dallas and Beth Hammack of Cleveland all indicated that they objected to an apparent easing bias expressed in the committee’s post-meeting statement. Kashkari said Sunday in an appearance on CBS’s “Face the Nation” that he could actually see a rate increase as the next policy move, in the worst-case scenario — if inflation holds at elevated levels.