Woofun AI data shows that the yield on the US two-year Treasury note climbed to 4.24%, marking its highest level since February 2025, driven by escalating geopolitical tensions in Iran and rising oil prices. The benchmark 10-year Treasury yield also increased by 3 basis points to 4.59%.

Swap trading data indicates that the market has largely priced in expectations for a Federal Reserve rate hike in September, with probability estimates rising significantly from 66% a week prior. Kenneth Crompton, Interest Rate Strategy Director at Australian National Bank, noted that market sentiment is increasingly sensitive to news regarding Iran, citing renewed vigilance due to continued attacks over the weekend and strikes on Russian refineries.