Treasury Yields Hold Steady Amid Middle East Tensions

Treasury yields held steady on Tuesday as investors waited for key inflation data due later in the week. The yield on the 10-year Treasury note, a benchmark for mortgages and auto loans, dipped by less than 1 basis point to 4.692%. Meanwhile, the 2-year Treasury note yield fell over 1 basis point at 4.224%.

The Middle East conflict continued to simmer, with oil prices rising after an Iranian official reiterated that the Strait of Hormuz wouldn't reopen until its conditions were met. US West Texas Intermediate futures settled higher by 1.3% at $83.20 per barrel, while Brent crude futures rose 1.4% to $88.91 per barrel.

Traders are also eyeing the consumer price index (CPI) print for July, due out on Wednesday. According to economists polled by Dow Jones, the CPI is expected to show a 0.1% increase month over month, with an annual inflation rate of 3.4%. Core CPI, which excludes food and energy prices, is forecast to rise by 0.2% and reach 2.5% annually.

Keith Buchanan, senior portfolio manager at Globalt Investments, noted that the CPI will set the stage for further interest rate decisions. If inflation remains contained, it may not lead to higher yields on long-term Treasuries.