10-year Treasury yield moves higher after Iran reportedly stops communication with U.S.

The 10-year Treasury yield ticked higher on Monday as tensions ramped up between the U.S. and Iran, further clouding the prospects for a deal to end the conflict.

The yield on the 10-year — the key benchmark for mortgages, auto loans and credit card debt — was up less than 1 basis point at 4.459%. It had risen as high as 4.518% during the day.

The yield on the 2-year Treasury note, which often move in reaction to short-term Federal Reserve rate decisions, was more than 2 basis points higher at 4.037%.

The 30-year bond yield, meanwhile, fell more than 1 basis point to 4.978%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

Borrowing costs gained as oil prices jumped after Iran’s Tasnim news agency reported that Iranian negotiators are stopping talks with the U.S. following Israeli attacks in Lebanon. The report also said that Iran will completely close the Strait of Hormuz.

The developments pushed oil prices higher on the first day of June. Prices of West Texas Intermediate futures jumped 5.93% to close at $92.54 per barrel, while Brent crude, the international oil price benchmark, closed up 4.24% at $97.79 per barrel.

President Donald Trump appeared unconcerned over the prospect of peace negotiations with Iran falling through, telling CNBC later Monday, “I don’t care if they’re over, honestly.”

But later Monday, Trump wrote in a post on Truth Social, “Talks are continuing, at a rapid pace, with the Islamic Republic of Iran.”

He also said in an earlier post that he “had a very productive call” with Israeli Prime Minister Benjamin Netanyahu and that “there will be no Troops going to Beirut, and any Troops that are on their way, have already been turned back.”

The U.S. and Iran had exchanged air strikes over the weekend. The U.S. successfully intercepted two Iranian ballistic missiles overnight that were targeting American forces based in Kuwait, according to U.S. Central Command.

Bond yields had steadied on Friday as traders closed out the month with an eye on geopolitical developments amid U.S. and Iranian negotiators reaching a 60-day memorandum of understanding that would extend the ceasefire.

Elsewhere, former Federal Reserve chair Jerome Powell warned in a speech that moves by the Trump administration to push the central bank towards lower interest rates risk damaging the public’s faith in the institution’s independence.