10-year Treasury yield rises from 1-week low as inflation worries return

By Vivien Lou Chen and Jamie Chisholm

Two- and 10-year Treasury yields finished higher for the fourth time in the past six sessions on Wednesday amid lingering inflation concerns and after a private-sector hiring report showed U.S. businesses added 143,000 jobs last month.

What happened

The yield on the 2-year Treasury BX:TMUBMUSD02Y rose 1.8 basis points to 3.636%, from around 3.618% on Tuesday.The yield on the 10-year Treasury BX:TMUBMUSD10Y jumped 4.1 basis points to 3.783%, from 3.742% on Tuesday.The yield on the 30-year Treasury BX:TMUBMUSD30Y advanced 5 basis points to 4.13%, from 4.08% on Tuesday.Tuesday's closing levels for 10- and 30-year yields were the lowest since Sept. 24 and Sept. 20, respectively.

What drove markets

On Wednesday, some market participants expressed concern that resurgent oil prices - on fears of an expanding conflict between Israel and Iran - and the prospect of a prolonged U.S. port strike could revive inflationary pressures. A strike by dockworkers that has closed East Coast and Gulf ports could affect the U.S. economy by as much as $4 billion a day, according to Jefferies analysts.

See also: Why inflation worries are starting to show up in this part of the market again

Separately, the ADP survey of private-sector job creation showed that September was the sixth straight month in which employment gains totaled less than 200,000. Still, the 143,000 jobs added last month were more than the 128,000 median forecast of economists polled by the Wall Street Journal.

Traders will be keeping an eye on more labor-market data this week that will likely impact the Federal Reserve's thinking on the pace of interest-rate cuts. The September nonfarm-payrolls report will be released on Friday before the market opens. ADP's survey is not always seen as a reliable predictor of how nonfarm payrolls will turn out.

-Vivien Lou Chen -Jamie Chisholm

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10-02-24 1543ET

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