Treasury yields fall as Iran war deal may open Strait of Hormuz

Yields on U.S. government debt drifted lower on August 5, 2026, as investors monitored diplomatic efforts to reopen the Strait of Hormuz.

On August 4, Treasury Secretary Scott Bessent told CNBC that a deal for commercial shipping through the strait could be reached. His comments sent yields sharply lower.

In early trading on August 5, the 10-year Treasury note yield shed more than 1 basis point to 4.6086%, the 30-year bond yield dropped 2 basis points to 5.1617%, while the 2-year note yield inched up 1 basis point to 4.2061%. Yields and prices move inversely; one basis point equals 0.01%.

U.S. Central Command later posted on X that the strait's southern route was “free and open.”

Oil prices, which tumbled nearly 6% on August 4, edged higher on August 5. West Texas Intermediate for September delivery rose 0.58% to $76.21 a barrel, while Brent crude gained almost 1.1% to $80.20.

Market attention turned to the Institute for Supply Management’s services PMI for July, due later on August 5. Economists expect a reading of 54.5, up from 54.0 in June. The data precedes the nonfarm payrolls and unemployment report for July, due on August 7, which will help gauge the inflation outlook and the Federal Reserve’s interest rate path.