Yields on U.S. government bonds edged lower on Tuesday, with the 10-year Treasury note falling to 4.36% as markets digested the implications of recent economic data and ongoing fiscal policy debates.
Investor demand for Treasuries remained strong after key economic figures showed signs of moderation. Additionally, recent trade deals between the U.S., Japan, and the European Union contributed to a stronger dollar, indirectly supporting bond prices.
Market participants anticipate that the U.S. Treasury will maintain its current auction sizes for Q3, aligning with dealer expectations despite earlier concerns about excessive borrowing needs following fiscal expansions under President Donald Trump’s administration.
President Trump’s continued criticism of Federal Reserve Chair Jerome Powell for not easing rates added pressure ahead of the central bank’s policy meeting. The Fed is widely expected to keep interest rates steady amid mixed economic indicators and inflationary concerns linked to upcoming tariffs.
U.S. equity markets remained under pressure. The Dow Jones Industrial Average slid over 150 points, while the S&P 500 and Nasdaq 100 hovered near break-even after early session gains faded, driven by disappointing corporate earnings and lingering trade tensions.
Despite a general agreement between the U.S. and the EU on future trade collaboration, investor anxiety persisted due to unresolved details, with potential tariff hikes looming for other U.S. trading partners by Friday.
Meanwhile, data from the Bureau of Labor Statistics showed that job openings in June 2025 declined by 275,000 to 7.437 million, below consensus estimates. Significant drops were recorded in accommodation and food services (-308,000), healthcare (-244,000), and finance (-142,000), although retail (+190,000) and public education (+61,000) sectors recorded gains.
Job quits also declined for the second consecutive month to 3.142 million, the lowest level since December 2024. The South and Midwest regions saw notable declines in voluntary job departures, while figures in the West and Northeast showed slight upticks.
The U.S. Treasury Department announced plans to auction $65 billion in 17-week bills on Wednesday, maturing on December 2, 2025. The Federal Reserve holds $664 million of these securities for its own account and may bid in addition to public participants.
