WASHINGTON (dpa-AFX) - Treasuries staged a recovery attempt after seeing initial weakness on Tuesday but moved back to the downside over the course of the session.
Bond prices bounced back near the unchanged line in late morning trading before once again coming under pressure in the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 3.8 basis points to 4.796 percent.
The ten-year yield closed higher for the fifth consecutive session, reaching its highest closing level since October 2023.
Treasuries moved back to the downside in afternoon trading after U.S. Central Command announced a fresh wave of attacks against Iran, striking Islamic Revolutionary Guard Corps targets.
Centcom said the strikes follow recent attempted attacks by the IRGC against commercial shipping in the Strait of Hormuz and against American service members deployed to the region.
In a post on Truth Social, President Donald Trump warned Iran would be 'hit again at a much harder and higher level' if they retaliate for the latest attack.
'But it will not be the biggest attack of them all, that is waiting in the wings and, when it is over, there will be very little left of the Islamic Republic of Iran!' Trump said.
Crude oil prices have surged in reaction to the latest attack, with U.S. crude oil futures spiking by more than 5 percent, renewing concerns about inflation and the outlook for interest rates.
Sharply higher crude oil prices weighed on treasuries early in the session, but bond prices rebounded after the Institute for Supply Management released a report showing a slowdown in the pace of growth in U.S. manufacturing activity.
The ISM said its manufacturing PMI dipped to 54.6 in August from 55.6 in July, although a reading above 50 still indicates growth. Economists had expected the index to edge down to 55.2.
Ahead of the release of the more closely watched monthly jobs report on Friday, traders may feel signs of economic weakness could keep the Federal Reserve from raising interest rates later this month.
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