U.S. Treasury yields hit 4.7% as Middle East conflict spikes oil prices

The benchmark 10‑year U.S. Treasury yield climbed to about 4.71‑4.72%, its highest level since January 2025, after a surge in Treasury yields and a jump in Brent crude to over $100 a barrel. The move was driven by renewed hostilities in the Middle East, including U.S. strikes on Iran and Houthi attacks on Saudi oil tankers that have tightened shipping routes and pushed oil prices higher. Higher oil prices and the prospect of further U.S. tariffs on 60 trading partners have revived inflation concerns, prompting investors to price in a higher probability of another Federal Reserve rate hike. The dollar rose against the yen, which slid toward a 40‑year low, while the pound and euro slipped modestly. Equity markets showed mixed reactions, with investors wary that rising yields could erode stock valuations. The turmoil also affected exporters such as Norway’s salmon producer Norwell, which warned that Middle‑East logistics disruptions and currency volatility pose greater risks to its margins than the recent U.S. tariff increase.

Overall, the confluence of oil price spikes, elevated Treasury yields and geopolitical tension is tightening global financial conditions and heightening market uncertainty.