Yields retreat across maturities
On Thursday, Treasury yields declined as traders tracked events in the Middle East and looked ahead to further U.S. economic releases scheduled for later in the day. The 10-year Treasury yield, the key reference rate for mortgages, auto loans and credit card debt, fell more than 7 basis points to 5.0732%. The 2-year note, which reacts more closely to near-term Federal Reserve policy decisions, dropped more than 5 basis points to 4.7654%. The 30-year yield, which frequently responds to geopolitical news, slipped 6 basis points to 5.3751%. A basis point is one-hundredth of a percentage point, and bond yields and prices move in opposite directions.[S1]
Oil jumps after report on possible Iran strikes
Crude prices climbed steeply on Thursday, with West Texas Intermediate futures nearing $100 per barrel in early trading, gaining 2.81% to $99.96. Brent crude, the international benchmark, advanced 3.33% to $112.44. The rally came after a New York Times report, which cited unidentified U.S. officials, said Washington and Israel are weighing a renewed, brief but intense campaign of strikes on Iran following next month's midterm elections.[S1]
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Risk-off mood hits stocks and supports the dollar
The drop in borrowing costs came as investors awaited initial jobless claims data from the Labor Department, with economists polled by Dow Jones expecting 200,000 claims for the week ended Oct. 17. A broader risk-off sentiment weighed on stock markets, with S&P 500 and Nasdaq futures falling and stock index futures under pressure as Iran tensions hurt sentiment. The dollar held steady as Middle East tensions simmered and oil rose. Gold edged lower as traders weighed Middle East signals and the Fed rate path, with one report saying bullion slipped below $4,100 as an energy shock reinforced a hawkish Fed outlook.[S1][S2][S3][S4][S5][S7]
