CNBC Daily Open: Watching Iran's economy; a losing game for bonds
U.S. Treasury Secretary Scott Bessent said the U.S. likely won't need to restart large-scale combat with Iran.
US markets experienced a downturn as the US government urged allies to collaborate in a plan to collapse Iran's economy and end the Middle East conflict. The US Treasury Department announced a buyback of longer-dated debt, aiming to stabilize yields and provide relief to investors. However, the move was seen as a temporary fix rather than a long-term solution, as bond yields rebounded higher, pushing stocks under pressure.
The US government bond yields increased from 5.1765% to 5.247%, while the 10-year yield rose to 4.7%, reflecting market skepticism about the effectiveness of the Treasury's measures. Elevated oil prices, particularly Brent crude futures, contributed to a negative sentiment, as they rose by 2% to $93.49 a barrel due to ongoing tensions in the Strait of Hormuz.
Despite the market turmoil, enthusiasm for AI investment remained strong, with semiconductor stocks gaining on the day.
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