Treasury Yields Hold as Oil Retreats on Escalating Ceasefire Hopes

U.S. Treasury yields remained flat across the curve, with the 10-year note yielding 4.24% and the 30-year bond at 4.56%, as markets reacted to shifting geopolitical dynamics. The stabilization followed a sharp 3.2% decline in West Texas Intermediate (WTI) crude futures, with CL=F trading at $78.30 per barrel, down from $81.05 late Friday. The move was fueled by diplomatic breakthroughs reported from indirect negotiations between key regional actors, raising expectations of a ceasefire in the coming weeks. The easing of energy price pressures contributed to a broad-based rally in equities. The S&P 500 gained 1.4%, driven by gains in financial and consumer discretionary sectors, while the Nasdaq Composite rose 1.1%. The VIX, a gauge of market volatility, dropped to 14.8, its lowest level since early February, reflecting diminished risk aversion. Long-duration Treasuries, tracked by TLT, rose 0.9%, as investors rotated from safe-haven assets toward higher-risk, higher-return opportunities. The shift underscores a meaningful re-pricing of geopolitical risk premiums. With oil prices down and Treasury yields flat, the market is pricing in a reduced likelihood of supply disruptions and inflationary spikes. Defense-related stocks, which had surged in recent months, saw mixed performance, with Lockheed Martin (LMT) down 1.3% and Raytheon Technologies (RTX) off 0.8%, signaling a potential rotation out of defense-focused equities as conflict fears recede.