Treasury yields slide as oil prices ease at end of day on Iran ceasefire hope

Treasury yields declined on Tuesday as the rally in oil prices lost momentum when Pakistani Prime Minister Shehbaz Sharif requested that President Donald Trump delay his deadline for Tehran to reopen the Strait of Hormuz.

The 10-year Treasury yield — the benchmark for everything from mortgages to auto loans to credit cards — was almost 3 basis points lower at 4.309%.

The yield on the 2-year Treasury note, even more sensitive to short-term Federal Reserve rate decisions, was down by more than 4 basis points at 3.806%.

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

Trump had said for days that the U.S. would bomb Iranian infrastructure, including power plants and bridges, if the Islamic Republic didn't reopen the Strait to global shipping by 8 p.m. ET. But, Sharif, the Pakistani leader, late in the day Tuesday asked Trump to delay the deadline by two weeks and asked Iran to reopen the Strait "as a goodwill gesture."

White House press secretary Karoline Leavitt said Trump "has been made aware of the proposal, and a response will come."

Oil prices finished the session relatively unchanged after climbing earlier. Brent crude futures, the global benchmark, ended 15 cents lower, at $109.62 a barrel. U.S. West Texas Intermediate futures, the domestic standard, rose 54 cents to settle at $112.95 per barrel.

Crude oil prices had risen earlier after Trump said on Truth Social Tuesday morning that "a whole civilization will die tonight, never to be brought back again," adding that "maybe something revolutionarily wonderful can happen, WHO KNOWS? We will find out tonight, one of the most important moments in the long and complex history of the World."

On Monday, Trump had said it was "highly unlikely" he would extend the deadline beyond Tuesday.

Iranian officials have so far rejected plans for a temporary ceasefire and instead called for a permanent end to the war.

"Markets and investors do not appear to have fully priced in, or fully considered the repercussions of such a scenario," Kambiz Kazemi, CIO of Validus Risk Management, said about the deadline passing and the war escalating. "As a result, unprepared portfolios and positioning could lead to an abrupt repricing across a wide range of risk assets."

Separately, the Commerce Department reported Tuesday that durable goods orders fell 1.4% in February, more than the 0.5% decline seen in January and worse than the 1.1% decline that economists polled by Dow Jones had estimated.