The yield on the US 10-year Treasury note climbed back above 4.37% on Tuesday, partially reversing the previous session’s decline after Iran denied engaging in talks to end the conflict, contradicting President Donald Trump’s claims. Tehran also reported fresh attacks on US targets, while Israel continued its strikes against Iran, keeping geopolitical tensions elevated. On Monday, Treasury yields had fallen after Trump delayed planned strikes on Iranian energy infrastructure for five days, citing what he described as productive discussions with Iran over the prior two days. The outcome of any negotiations and the potential reopening of the Strait of Hormuz remain highly uncertain, and it may take time for Middle Eastern energy capacity to recover to previous levels. This backdrop raises the risk of higher inflation in the coming months and increases the likelihood of interest rate hikes by major central banks. Investors are now turning their attention to upcoming US manufacturing data for further insight into how businesses are coping with the heightened geopolitical risks.