Treasury yields fall as investors remain optimistic on Iran peace deal prospects despite U.S. strikes

Traders work on the floor of the New York Stock Exchange (NYSE) on December 02, 2025 in New York City. Spencer Platt | News | Treasury yields fell on Wednesday as investor optimism over a potential settlement to the war in Iran was undented by pressure on the fragile ceasefire between Washington and Tehran. The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — fell more than 2 basis points to 4.465%. The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, also fell more than 2 basis points to 4.022%. The longer-dated 30-year Treasury bond yield fell 2 basis points to 5.005%. One basis point is equal to 0.01%, and yields and prices move in opposite directions. U.S. forces carried out what the Pentagon described as "self-defense" strikes in southern Iran early Tuesday, targeting missile launch sites and Iranian vessels allegedly attempting to deploy mines, even as Washington insisted it was still observing restraint under the ongoing ceasefire framework. In response, Iran's foreign ministry accused the U.S. of a "gross violation" of the terms of the ceasefire. But global sovereign bond markets broadly rallied on Wednesday. U.K gilts extended a relief rally that began on Friday as investor concerns about domestic political developments began to ease. U.K. …