Treasury yields fall as Iran peace hopes fuel relief rally
Treasury yields fell on Wednesday as the prospect of a resolution to the Iran conflict lifted investor sentiment.
The yield on the 10-year Treasury fell more than 3 basis points to 4.275%. The 2-year yield dropped more than 4 basis points to 3.758%, while the 30-year Treasury yield was up more than 2 basis points at 4.869%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The moves come after President Donald Trump said Tuesday that American forces would leave Iran in “two or three weeks,” adding that the U.S. would end its war “whether we have a deal or not.”
Tensions thawed on Tuesday, with The Wall Street Journal reporting that Trump told aides he was willing to end the war even if the Strait of Hormuz remains largely closed for now. Later, the New York Post reported that the President believes the Iran war will likely end soon and other nations will handle the Strait.
U.S. equities posted their best daily performance since May on Tuesday, as investors were buoyed by the developments. The blue-chip Dow added more than 1,100 points, or about 2.5%. The S&P 500 advanced 2.9%, while the Nasdaq Composite jumped 3.8%.
Elsewhere on Wednesday, traders will be watching February’s retail sales report, ADP private sector employment data for March, and March’s ISM manufacturing indicators.
— CNBC’s Lisa Kailai Han also contributed to this report.
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