Yields decline on continued peace deal hopes. Treasury yields fell along with oil prices as market optimism for a peace deal outweighed President Trump’s threats of retaliation against Iran after an attack on a US helicopter last night. After market hours today, the US launched “self-defense” strikes against Iran. The 2-year yield closed 4 bps lower at 4.12% and the 10-year yield moved 5 bps lower at 4.52%. Meanwhile, WTI crude fell over 5% intraday, before settling around $89 per barrel. Equities declined as chipmaker stocks slid, with technology-heavy NASDAQ closing 0.97% lower.
US trade deficit decreases on oil exports. The US trade deficit narrowed to $55.9 billion in April from $56.6 billion the prior month, as exports rose 2.6%, largely driven by a sharp climb in crude oil and petroleum products. According to US Energy Information Administration data, the US exported a record volume of oil, with gasoline, diesel, and fuel products also posting increases as the Iran war keeps the Strait of Hormuz closed, blocking the oil supply that typically flows through the region. Meanwhile, imports climbed 2%, led by computers and semiconductors. The report also sheds light on the trade balance the US has with key partners, such as Canada, Mexico, and China, which will serve as a guide for upcoming trade negotiations.
Existing home sales hit fastest pace this year. Existing home sales rose 3.2% in May to an annualized rate of 4.17 million contract closings, well above estimates of a 1.1% increase and marking the fastest pace of sales this year. The South, Northeast, and Midwest drove the gains, with the Midwest recording its most closings since April 2023. The median sales price edged up 1.3% from a year prior and inventory climbed to 1.55 million, the highest since last July. Lawrence Yun, chief economist at the National Association of Realtors, said in a statement today, “More Americans are on the move, with home sales rising to the highest level since December… This is great news for the housing market and the economy.”
