West Texas Intermediate futures settled 4% lower at $79.26 per barrel on Tuesday as the pause in U.S.-Iran hostilities held, while Brent crude ended 4.8% lower at $84.09. Treasury yields retreated across the curve ahead of the Federal Reserve's rate decision on Wednesday.
West Texas Intermediate futures were 4% lower to settle at $79.26 per barrel on Tuesday, with the ongoing pause in U.S.-Iran hostilities sending oil prices lower and raising hopes of a more sustainable ceasefire arrangement. Brent crude, the global oil price benchmark, was 4.8% lower to end at $84.09.
The ongoing pause in hostilities has continued to push oil prices lower. Traders are also monitoring events in the Middle East, after President Donald Trump said the U.S. had held "good talks" with Iran on Monday.
Treasury yields retreat before the Fed decision
Treasury yields continued to retreat on Tuesday as traders awaited this week's Federal Reserve interest rate decision. The 10-year Treasury note yield — the main benchmark for mortgages, auto loans and credit card debt — was down by more than 3 basis points at 4.606%.
The yield on the 2-year Treasury note, which tends to react in line with short-term Federal Reserve interest rate decisions, was about 4 basis points lower at 4.281%. Longer-dated 30-year yields, often sensitive to geopolitical events, were seen more than 3 basis points lower at 5.092%.
Markets price a September hike, not a July move
Investors will be closely watching the Fed's interest rate decision, due Wednesday. The rate-setting Federal Open Market Committee is expected to leave rates unchanged at the range of 3.5% to 3.75%. Markets are instead pricing in a 76% chance of a September hike, according to the CME Group's FedWatch tool.
Source: CNBC
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