Treasury Yields Extend Past Month’s Slide as Oil Prices Drop

Equities weakness concentrated in large technology company shares benefited the Treasury market last month as investors piled into lower-risk assets.“The historical negative correlation between bonds and equities seems to have returned over the past month, and the gains today could be related to investors looking to protect further downside in equities,” said Steven Zeng, an interest-rate strategist at Deutsche Bank.

The oil price slide “also supports Treasury yields to move lower.”The US 10-year yield declined as much as six basis points to under 4.87%, the lowest level since Sept. 10.West Texas Intermediate futures slid 7.4% to settle near $96.50 a barrel after Washington and Tehran signaled openness to talks to resolve the months-long conflict roiling Middle East energy supplies.Fed policymakers raised rates in September for the first time since 2023 after rising oil prices caused inflation to accelerate.

Traders continue to price in at least two more quarter-point hikes by the end of next year, however the cumulative amount of expected tightening has declined over the past month. Short-term Treasury yields falling less than longer-term ones “is likely a consequence of the sharp post-FOMC steepening move” following last week’s decision to leave rates unchanged, said Dhiraj Narula, US rates strategist at HSBC’s US investment bank.

The move also reflects “questions around potential long-end Treasury supply cuts” that US officials may answer at Wednesday’s quarterly discussion of their borrowing strategy.Related story: Wall Street Eyes Biggest Treasury Sales Overhaul in Years(Updates with pricing throughout.)More stories like this are available on bloomberg.com©2026 Bloomberg L.P.