Treasury Yield Slips Below 5% as Oil Retreats Before Trump-Xi Summit

The 10-year Treasury yield fell to 4.93% early Tuesday, while U.S. crude dropped 2.4% to $93.50 a barrel. Investors tracked the moves ahead of President Donald Trump’s meeting with Chinese leader Xi Jinping.

The yield slipped from 4.96% late Monday, after rising above 5% last week. Lower yields can ease borrowing costs and reduce pressure on stocks, especially technology companies whose valuations are sensitive to interest rates.

Oil’s decline had a separate, immediate driver: signs that more crude could move out of the Middle East. Saudi Arabia restarted its East-West pipeline, while shipping through the Strait of Hormuz was increasing, Reuters reported.

Hopes for U.S.-Iran diplomacy also weighed on prices. Brent crude briefly fell below $98 a barrel in early trading, then pared losses and settled Tuesday at $99.25, down 1.1%, according to the Associated Press.

The retreat followed a sharp rally the previous week, when Brent touched nearly $110. It remained far above the roughly $72 level before the war with Iran began, leaving traders focused on whether shipments can recover.

Lower oil can cool concern about fuel costs feeding into inflation, a key issue for bond investors after the Federal Reserve raised its benchmark rate last week. But a lasting drop depends on steadier supply, not just hopes for talks.

U.S. stocks paused Tuesday after a strong Monday session. The Nasdaq had climbed 2.3% on Monday as falling oil and yields helped technology shares; by Tuesday’s close, it set another record while the S&P 500 was nearly flat.

Trump and Xi were scheduled to meet Thursday, September 24, at the White House. Traders were watching for signs on trade and technology, while oil and bond markets remained exposed to developments around Iran and Hormuz shipping.