Treasury yields tumble as Middle East tensions ease

Treasury yields fell on Monday after the U.S. and Iran halted hostilities in the Middle East over the weekend, pushing energy prices lower.

The yield on the key 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — was more than 3 basis points lower at 4.6406% in early trade. Shorter- and longer-term yields also moved lower.

The yield on the 2-year Treasury note , which typically tracks short-term Federal Reserve interest rate decisions, dropped 2 basis points to 4.3030%

Meanwhile, the 30-year Treasury yield, which traditionally moves in response to geopolitical events, was down more than 3 basis points to 5.1260%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

Monday's slide in borrowing costs comes after the U.S. and Iran held fire for the third consecutive night.

Oil prices rapidly reversed course, with U.S. West Texas Intermediate futures sliding 5.34% to $84.55. Global benchmark Brent crude — which last week had approached the $100 per barrel level — was last seen 5.77% lower, at $91.20.

The moves come as traders look ahead to the Federal Reserve's latest interest rate decision, due Wednesday. Consensus forecasts indicate the rate-setting Federal Open Market Committee will leave rates unchanged at 3.75%.

As markets weigh how the evolving Middle East picture is likely to shape the Fed's rate call, investors are also keeping an eye on a slew of other economic data releases scheduled this week. These include June's core PCE price index, the latest quarterly GDP print, and new orders data for U.S.-made durable goods.