US Treasury bond prices rallied across maturities during the trading session, with the 10-year Treasury yield falling 5.40 basis points to 4.514% as of 9:37 AM Eastern Time. The bond market rally was driven by intensified risk-aversion sentiment as the US-Iran military conflict escalated and US equity markets declined sharply. Geopolitical tensions prompted investors to seek safe-haven assets, with the technology-heavy Nasdaq Composite falling 2.34% and the Philadelphia Semiconductor Index plunging 5.17% during the same session.
Treasury Yields Decline Across All Maturities
According to Yonhap Infomax's intraday interest rate screen, the 10-year Treasury yield stood at 4.514% as of 9:37 AM Eastern Time, down 5.40 basis points from the previous trading day's 3 PM reference rate. The policy-sensitive 2-year Treasury yield fell 3.40 basis points to 4.122% during the same period. The 30-year Treasury yield declined 5.00 basis points to 5.047%. The yield spread between 10-year and 2-year Treasuries narrowed from 41.2 basis points to 39.1 basis points. Bond prices and yields move in opposite directions.
US Military Expands Airstrikes to Iranian Civilian Infrastructure
The US military escalated its operations against Iran by expanding airstrikes to civilian facilities. US Central Command, which oversees military operations in the Middle East, announced it struck dozens of Iranian coastal air defense facilities, military logistics infrastructure, and naval assets. Local Iranian media reported that US attacks extended to civilian infrastructure, with civilian railways and bridges destroyed. Iran broadened its retaliation scope across the Gulf region, launching missiles at US military bases in Kuwait, Bahrain, and Qatar. Iran had previously warned it could retaliate against energy infrastructure in neighboring Gulf countries if the US attacked facilities such as power plants or bridges.
Safe-Haven Demand Drives Bond Rally Amid Stock Market Decline
The bond market prioritized safe-haven sentiment over inflation concerns despite the escalating Iran conflict. Demand for Treasuries strengthened as US equities plummeted, led by technology and semiconductor stocks. The Nasdaq Composite Index declined 2.34% while the Philadelphia Semiconductor Index fell 5.17% during the session. Concerns grew that prolonged conflict in Iran could trigger economic recession as surging oil prices increase corporate costs and weaken consumer spending. Rising recession probability typically pushes US Treasury yields lower. Treasury yields briefly reduced their decline after US import prices rose more than expected, but reversed course amid the prevailing safe-haven mood.
Oil Prices Surge on Escalating Middle East Conflict
International oil prices resumed their sharp upward trajectory as US attacks expanded to infrastructure facilities. West Texas Intermediate (WTI) crude oil for August delivery rose 3.43% to $81.66 per barrel. Market participants expressed growing anxiety that excessively high oil prices could serve as a catalyst for economic recession by inflating business costs and dampening consumption. The US Labor Department reported that the import price index rose 0.3% month-over-month, significantly exceeding the market consensus forecast of a 0.7% decline.
FAQ
Why did US Treasury yields fall during this trading session?
Treasury yields declined as investors sought safe-haven assets amid escalating US-Iran military conflict and a sharp decline in US equity markets, with the Nasdaq falling 2.34% and the Philadelphia Semiconductor Index dropping 5.17%.
What specific Treasury yield movements occurred?
The 10-year Treasury yield fell 5.40 basis points to 4.514%, the 2-year yield dropped 3.40 basis points to 4.122%, and the 30-year yield declined 5.00 basis points to 5.047% as of 9:37 AM Eastern Time.
How did the US-Iran conflict escalate?
US Central Command struck dozens of Iranian coastal air defense facilities, military logistics infrastructure, and naval assets, with local Iranian media reporting attacks extended to civilian railways and bridges, while Iran launched missiles at US military bases in Kuwait, Bahrain, and Qatar.
