WASHINGTON (dpa-AFX) - After trending higher over the past few sessions, treasuries showed a lack of direction over the course of the trading day on Tuesday.
Bond prices spent the day bouncing back and forth across the unchanged line before closing roughly flat. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by less than a basis point to 4.196 percent.
Despite the lackluster performance, the slight decrease on the day pulled the ten-year yield down to its lowest closing level in three months.
The choppy trading on the day came as traders seemed reluctant to continue buying treasuries despite the release of a from the Institute for Supply Management unexpectedly showing a modest slowdown in the pace of growth by U.S. service sector activity in the month of July.
The ISM said its services PMI edged down to 50.1 in July from 50.8 in June. While a reading above 50 still indicates growth, economists had expected the index to rise to 51.5.
A separate report released by the Commerce Department showed the U.S. trade deficit narrowed by slightly more than anticipated in the month of June.
The Commerce Department said the trade deficit shrank to $60.2 billion in June from a revised $71.7 billion in May.
Economists had expected the trade deficit to fall to $61.6 billion from the $71.5 billion originally reported for the previous month.
Bond traders also shrugged off ongoing trade concerns following President Donald Trump's latest comments on tariffs.
In an interview on CNBC's 'Squawk Box,' Trump said he will be announcing new tariffs on semiconductors and chips as soon as next week, 'because we want them made in the United States.'
Trump also told CNBC planned tariffs on pharmaceuticals imported into the U.S. could eventually reach as high as 250 percent.
Amid a lack of major U.S. economic data, trading on Wednesday may be impacted by reaction to the results of the Treasury Department's auction of $42 billion worth of ten-year notes.
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