Treasury yields fall amid hopes of Israel-Hezbollah ceasefire

U.S. Treasury yields fell on Tuesday as President Donald Trump announced a ceasefire between Iran-backed Hezbollah and Israel, boosting investor confidence.

The yield on the 10-year U.S. Treasury note, the key benchmark for U.S. government borrowing, fell more than 4 basis points to 4.435%.

The yield on the 2-year Treasury note, which more closely tracks short-term Federal Reserve interest rate policy, fell about 3 basis points to 4.022%. The yield on the longer-dated 30-year Treasury note fell more than 3 basis points to 4.954%.

One basis point equals 0.01%, and yields and prices move in opposite directions.

Global bond yields eased substantially on Tuesday, with European 10-year bond yields falling 5-7 basis points across the continent.

Borrowing costs rose on Monday after Iran’s Tasnim news agency reported that Iranian negotiators had halted talks with the United States following Israeli attacks on Lebanon and that Tehran may opt to completely close the Strait of Hormuz.

President Donald Trump appeared unconcerned about the possibility of peace talks with Iran failing, telling CNBC later Monday, “Honestly, I don’t care if they end.” But later Monday, Trump wrote in a post on Truth Social: “Talks with the Islamic Republic of Iran continue apace.”

Investors are having a hard time digesting how the ongoing conflict between Israel and Hezbollah is affecting the chances of a broader ceasefire agreement between Washington and Tehran.

Netanyahu, a x post Later Monday, he said he told Trump that “Israel will attack terrorist targets in Beirut if Hezbollah does not stop attacking our cities and our citizens.”

“This stance will remain unchanged. In parallel, the Israeli Armed Forces will continue to operate as planned in southern Lebanon,” Netanyahu wrote.