Yields climb with US-Iran deal uncertain. Treasury yields rose today as tensions in the Middle East re-escalated, with the path to a US-Iran deal to reopen the Strait of Hormuz remaining uncertain despite positive signs in recent days. Oil prices rallied sharply alongside yields, with Brent crude climbing ~5% to settle around $83 per barrel. The 2-year yield closed 6 bps higher at 4.25%, while the 10-year yield closed 7 bps higher at 4.68%. Meanwhile, equities edged lower on the uncertainty, with the S&P 500 and NASDAQ closing 0.18% and 0.06% lower, respectively.
Iran to bar US and Israeli ships from Hormuz. Iranian media today reported that Iran will impose a ban on US and Israeli ships in the Strait of Hormuz, with Israeli-tied cargo also prohibited. Vessels from other adversaries would be required to pay tolls before crossing, with fees meant to cover environmental and insurance costs. The announcement comes as Iran and Oman have reportedly reached a proposed agreement to manage traffic through the strait, a key factor in whether the waterway reopens and energy flows resume. The US has maintained that there must be free transit through the strait, but Iran has said the US must first remove its naval blockade entirely.
Job cuts hit two-year low, hiring plans accelerate. US job cuts came in at 33.4k in July, down 46.1% YoY according to outplacement firm Challenger, marking the lowest reading in two years. Andy Challenger, chief revenue officer for the firm, noted that “layoff plans continue to be announced primarily in Tech, and artificial intelligence is still the story.” The technology sector has accounted for 31% of job cuts this year, or 149k cuts through July 2026 which is a 67% increase versus the same period last year. On the hiring side, employers announced plans to add 16k workers in July, a 47% jump from June led by aerospace and defense. Also today, initial jobless claims data showed 198.8k filings in the week ending August 1, the third straight week of claims below 200k.
