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US government debt rose on Monday as investors scooped up Treasuries following a rout last week driven by concerns over President Donald Trump’s tariffs.
The 10-year Treasury yield, which sets government borrowing costs and underpins pricing on financial assets worldwide, fell 0.11 percentage points on Monday to 4.38 per cent. That puts the 10-year on track to record its first day of declines in yield, which move inversely to price, since April 4.
Monday’s move came after the White House at the weekend temporarily excluded smartphones and other consumer electronics from steep “reciprocal” tariffs it introduced earlier this month. Trump had already paused most of the reciprocal duties shortly after they went into effect last week, but boosted levies on China in a decision that increased concerns over US tech companies, which are heavily exposed to the country.
“While uncertainty over Trump’s tariffs is far from over, we think the pause [on key tech products] indicates a sensitivity to market stress from the administration,” said Ulrike Hoffmann-Burchardi, chief investment officer of global equities at UBS Global Wealth Management.
The 10-year Treasury yield surged about 0.5 percentage points last week in its biggest weekly increase since 2001. The scale of the sell-off in Treasuries, typically considered one of the world’s premier havens, caused worries that investors were eschewing US assets in general.
Some investors said the pressure on US government debt had created a good entry point, with yields now much juicier than they were a week ago. At the same time, Treasuries tend to rally when economic growth falters, something that Wall Street banks see as a possibility.
“Government bonds look very attractive here. This is starting to create attractive opportunities for long-term investors. If you expect US growth to decline further, then yields could be much lower going forward,” said Mohit Mittal, chief investment officer of core strategies at bond giant Pimco.
Mittal added that even with the pause in reciprocal tariffs and the tech carve-outs, Trump had “created an environment of extreme uncertainty”.
“Until we get more certainty, businesses and consumers will continue to act with caution. That brings us closer to a recession in 2025. That’s the fundamental story for the bond market,” he said.
Investors in the US stock market have also continued buying up shares after a recent slump has pulled the market far from recent highs. The blue-chip S&P 500 index was up 0.8 per cent on Monday, reducing its losses for 2025 to 8.1 per cent. The tech-heavy Nasdaq Composite was up 0.6 per cent on Monday.
