Bond yields jump, oil extends gains as US-Iran ceasefire expires

Bond yields soared to their highest in decades as the US-Iran ceasefire expired, causing oil prices to rise for the third day straight, while stocks in Asia lost early gains. The yield on the U.S. 30-year Treasury bond peaked at 5.321%, its highest in almost two decades, while the 10-year yield increased by 0.4 basis points to 4.724%.

Analysts noted that recent moves above 4.65% for the U.S. 10-year bond typically prompted supportive remarks from the Trump administration, but this time, there were no such assurances. Instead, indications pointed to no imminent resolution to the Iran conflict as the 60-day truce came to an end. Asian markets suffered as S&P 500 e-mini futures declined 0.2% and MSCI's Asia-Pacific index outside Japan dropped 0.3%, reversing initial gains.

Taiwan and China's underperformance impacted U.S. benchmarks, with South Korea's KOSPI falling back to flat after a holiday and the Nikkei 225 sinking 1.6%. Brent crude futures climbed 0.4% to $91.20 per barrel, marking the third consecutive day of gains. Longer-end developed market yields continued to decline, with the 10-year Japanese government bond reaching a three-decade high at 2.94%.

The S&P 500 slipped 0.5%, and the Nasdaq Composite edged down 0.3% amid weak U.S. economic data, including a surprise drop in retail sales, prompting traders to lower expectations for an imminent Fed rate hike. President Trump reiterated his opposition to extending the Iran truce, and the U.S. dollar index rose 0.1% to 99.60, recovering from a two-month low.

Gold slipped 0.3% to $4,402.89, ending a two-day winning streak, while Bitcoin and Ether fell 0.3% each, trading at $64,159.76 and $1,899.34, respectively.