The yield on the 10-year Treasury note inched lower Tuesday as investors assessed the outlook for the U.S. economy and digested the latest round of corporate earnings.
The yield on the benchmark 10-year Treasury note traded about 2 basis points lower at 3.574%, while the yield on the 2-year Treasury bond added a basis point to 4.201%. Yields move inversely to prices.
"The rally in the long end of the market seems to have stalled, with 10-year treasuries holding near the 3.5% level, similar to what happened in December and February," said Kathy Jones, Charles Schwab's chief fixed income strategist, noting that yields edged up by about 40 to 50 basis points thereafter. "If this is just another yield bounce in yields amid a long-term decline, then it could be an opportunity for investors looking to lock in better yields."
Wall Street is closely following economic data for a read on where the Federal Reserve might take interest rates at its policy meeting in early May. More than 86% of traders are calling for a 25 basis point hike at the next policy meeting, according to CME Group's FedWatch tool.
Strong data could signal a resilient economy and convince the central bank it has more hiking to do to temper high inflation. Last month, some traders called for a pause in hiking after turmoil rattled the banking sector.
Elsewhere, Wall Street parsed through a new round of corporate earnings for insight into how corporate America is faring against a backdrop of rising rates and persistent inflation. Johnson & Johnson and Bank of America showcased better-than-expected earnings results on Tuesday, while Goldman Sachs fell short on revenue estimates.
Earnings this season have showed continued strength despite high inflation, rising rates and fears of a looming recession.