U.S. Treasury Yields Dip Amid Labor Market Jitters and Escalating Geopolitical Tensions

U.S. Treasury yields fell across the curve on Thursday, with the 10-year note yield dropping to 4.18%, its lowest level since early January, as market participants shifted toward safe-haven assets. The move followed a mixed jobs report that showed nonfarm payrolls rose by 180,000 in January, below the forecasted 205,000, while the unemployment rate ticked up to 4.2% from 4.1%. These figures fueled speculation that the Federal Reserve may pause further rate hikes despite persistent inflation pressures. The Labor Department's report also revealed a slowdown in average hourly earnings growth, rising just 3.1% year-over-year, down from 3.3% in December. This data strengthened expectations that the economy is beginning to cool, prompting traders to reassess the Fed’s tightening trajectory. Yields on two-year Treasuries declined to 4.79%, while the 30-year bond yield settled at 4.62%. Simultaneously, markets reacted to developments in the U.S.-Iran nuclear talks, where diplomatic progress was reported in Vienna, but with unresolved issues over uranium enrichment limits. The uncertainty contributed to a risk-off sentiment, particularly in global equity markets, with the S&P 500 closing 0.8% lower. Oil prices rose 1.4% on speculation of potential supply disruptions if negotiations falter. The combination of economic softening signals and geopolitical fragility has driven a significant rotation into long-duration U.S. debt. Mutual funds and ETFs reported inflows of $5.6 billion into Treasury-focused vehicles last week, marking the largest weekly gain in nearly three months.