The 10-year Treasury yield was little changed on Tuesday as oil prices tumbled after President Donald Trump warned that Iran would be hit “TWENTY TIMES HARDER” if it attempted to halt shipments through the Strait of Hormuz.
The yield on the 10-year Treasury fell more than 1 basis point to 4.117%. The 30-year Treasury bond rose more than 1 basis point to yield 4.75%. The 2-year Treasury note yield declined more than 3 basis points to 3.555%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
“If Iran does anything that stops the flow of Oil within the Strait of Hormuz, they will be hit by the United States of America TWENTY TIMES HARDER than they have been hit thus far,” Trump said in a post on Truth Social Monday stateside.
Trump had earlier signaled that the conflict with Iran could end soon, sending oil prices plunging 10% before paring losses. Oil prices trimmed losses on Tuesday, however, hovering near $90 per barrel.
Tuesday will be “our most intense day of strikes inside Iran,” according to Defense Secretary Pete Hegseth. He remarked that “Iran stands alone, and they are badly losing.”
Energy ministers from G7 were scheduled to meet virtually later Tuesday to discuss a possible release of emergency oil reserves to address supply disruptions triggered by the Iran war, sources told CNBC.
The talks come after the countries’ finance ministers met Monday to consider tapping strategic reserves, though no decision was reached. Discussions among member states have been “positive,” the sources said, adding that any coordinated release would likely follow the energy ministers’ meeting.
In a statement issued late Monday, International Energy Agency Executive Director Fatih Birol said he participated in the G7 finance ministers’ meeting at the invitation of France to discuss the global economic outlook and the intensifying Middle East conflict.
“We discussed all the available options, including making IEA emergency oil stocks available to the market,” Birol said.
IEA member countries hold more than 1.2 billion barrels of public emergency oil stocks, along with an additional 600 million barrels of industry stocks held under government obligation.
Birol added that he remains in close contact with energy ministers worldwide, including those in Saudi Arabia, Brazil, India, Azerbaijan and Singapore.
Investors are also bracing for February inflation data due Wednesday, followed by the January personal consumption expenditures index and JOLTS job openings figures on Friday.
— CNBC’s Emma Graham contributed to this report