Treasury Yields Rise as Services Data, Tariffs Loom

Yields Tick Higher as Markets Brace for More Tariff Drama
The 10-year Treasury yield edged up to 4.21% early Tuesday as investors digested new signals from the Trump administration’s tariff agenda and awaited a fresh read on U.S. services sector activity.

By 4:15 a.m. ET, yields on other government bonds also moved:
-2-year note: climbed to 3.706%
-30-year bond: slightly up to 4.805%

The backdrop: Traders are watching closely for the latest ISM non-manufacturing PMI, expected to come in at 51.5, slightly higher than June's 50.8. Any surprise there could rattle expectations about economic momentum.

Trump Talks Tariffs Again—India on Notice
Markets also got a jolt from Trump’s latest remarks. On Monday, the president warned of “substantial” new tariffs on Indian goods, though he didn’t specify by how much. Just last week, he floated a 25% levy—plus a potential “penalty” if India keeps importing Russian oil.

In response, India’s Foreign Ministry hit back late Monday, accusing the U.S. and EU of hypocrisy. New Delhi argued it turned to Russia only after traditional suppliers redirected oil to Europe post-Ukraine invasion.

What It All Means
Rising yields signal markets expect more inflation pressure—or a more hawkish Fed. But combine that with renewed trade tensions, and investors are walking a tightrope between growth optimism and geopolitical unease.

As the services data drops and Trump’s tariff threats echo, bond markets may offer the first clue to where confidence cracks—or holds.