Yields plunge on optimism US-Iran deal will be reached soon. Treasury yields plummeted to intraday lows overnight on an Axios report that the US and Iran were nearing a peace agreement. The move largely held as yields closed 5-8 bps lower across the curve, with the 2-year yield at 3.87% and the 10-year yield at 4.35%. Meanwhile, equities soared to new all-time highs once again, with the S&P 500 and NASDAQ closing 1.46% and 2.02% higher, respectively. Brent crude is now trading ~7% lower on the day at $102 per barrel.
US-Iran rumored to be near an agreement. The US presented Iran with a one-page memorandum which reportedly contains a gradual plan to reopen the Strait of Hormuz and remove the US naval blockade. Iran is expected to respond in the next two days, according to Pakistan. President Donald Trump told reporters today, “Iran cannot have a nuclear weapon, and they won’t, and they’ve agreed to that, among other things. We’ve had very good talks… and it’s very possible that we’ll make a deal.” Trump also said if Iran does not agree, US attacks will start again, and “it will be, sadly, at a much higher level and intensity than it was before.”
ADP data shows US job market continues to stabilize. Private US businesses added 109k jobs in April, according to ADP data released today. The print was slightly below the 120k median estimate but well above March’s revised 61k,marking the largest increase in over a year. Health services and education accounted for more than half of the gains, while the trade, transportation, and utilities sectors also added jobs. Nela Richardson, ADP’s chief economist, noted, “Small and large employers are hiring, but we’re seeing softness in the middle.” The report suggests employers may be less concerned about uncertainty surrounding tariffs, immigration, and fiscal policies in their hiring decisions, as layoffs remain subdued.
