The yield on the 10-year US Treasury note hovered around 4.58% on Thursday, remaining near a seven-week high as renewed conflict in the Middle East pushed oil prices higher, fueling inflation concerns and strengthening expectations for further interest rate hikes.
The US military confirmed it had carried out strikes on Iran for a second straight day in an effort to curb Tehran’s ability to threaten navigation through the Strait of Hormuz, while Iran threatened a large-scale retaliatory operation against US military bases across the region.
Meanwhile, minutes from the Federal Reserve’s June meeting showed that only a few policymakers favored a rate increase, though officials expressed growing concern over inflation.
Markets continue to price in at least one Fed rate hike by the end of 2026.
Investors are now awaiting the latest weekly jobless claims and existing home sales data for fresh guidance on the interest rate outlook.