US Dollar Rises as Yields Climb to Multi-Month Highs; Major Earnings and Geopolitical Risks in Focus
Key Takeaways
- •The US dollar is appreciating as Treasury yields rise across the curve, with the 10-year yield reaching 4.693% and the 30-year hitting 5.176%, both at multi-month highs.
- •Crude oil has surpassed $91 per barrel for the first time since June 11, driven by elevated Middle East tensions including an Iranian missile strike targeting the Al-Abdali border crossing between Iraq and Kuwait.
- •US equity indices are broadly lower, with the NASDAQ down approximately 300 points and the S&P 500 down about 55 points, as rising yields pressure rate-sensitive valuations.
- •Defense contractors Lockheed Martin and RTX Corp both exceeded earnings estimates and raised their full-year guidance, reflecting strong demand against a backdrop of intensifying global conflicts.
- •The European Central Bank is expected to maintain unchanged rates, creating a yield divergence with the United States that historically supports the dollar against the euro.
The US dollar is gaining ground as Treasury yields continue their upward march, with higher-yielding US debt attracting capital flows and underpinning demand for the currency. The 10-year yield has reached its highest level since January 2025, while the 2-year yield stands at its peak since February 2025. Crude oil prices are also exerting upward pressure, with the commodity surpassing $91 per barrel for the first time since June 11 — a move that reinforces the dollar's commodity-pricing dynamics while simultaneously feeding inflation expectations that keep upward pressure on yields.
US Treasury Yields:
- 2-year: 4.332%, up 3 basis points
- 5-year: 4.443%, up 3.6 basis points
- 10-year: 4.693%, up 3.6 basis points
- 30-year: 5.176%, up 2.9 basis points
The accompanying video analysis examines the technical drivers behind three major currency pairs — EUR/USD, USD/JPY, and GBP/USD — ahead of the North American session, covering market bias, key risk levels, and price targets for each.
Key Upcoming Data and Events
The European Central Bank rate decision is scheduled for 8:15 AM ET, with no change expected. The ECB's hold stands in contrast to the upward drift in US yields, a divergence that has historically been a factor supporting the dollar against the euro. At 8:30 AM ET, weekly initial jobless claims will be released, with consensus at 212K versus 208K in the prior week. Canadian retail sales data will also be published, with an estimated reading of 10%.
Geopolitical Developments
Overnight developments in the Middle East kept geopolitical tensions elevated, contributing to the bid in crude oil and safe-haven demand for the dollar, though there were tentative signs that back-channel diplomacy remains active. Iran's Foreign Minister stated that sufficient mediators are in place and that communication with the United States continues without difficulty, suggesting diplomatic channels remain open despite the ongoing conflict.
At the same time, Iran reportedly launched a missile strike targeting the Al-Abdali border crossing between Iraq and Kuwait, with explosions also reported near the Iraqi-Kuwaiti border. Iraqi Prime Minister Ali al-Zaidi and Iranian President Masoud Pezeshkian held talks aimed at strengthening cooperation, underscoring Baghdad's efforts to balance relations as regional tensions intensify.
Meanwhile, Ukrainian President Zelensky warned that Russia is increasing attacks on vessels in the Black Sea, adding another layer of geopolitical risk for global trade and shipping.
US Stock Market
US equity indices are broadly lower as rising yields weigh on rate-sensitive valuations:
- NASDAQ: down approximately 300 points
- S&P 500: down approximately 55 points
- Dow Jones Industrial Average: down approximately 32 points
Earnings Recap
A busy morning of corporate earnings produced the following results:
- American Airlines (AAL): BEAT — Adj. EPS $0.15 vs. $0.03 est.; Revenue $16.7B vs. $16.70B est. (in line)
- Blackstone (BX): BEAT — EPS $1.54 vs. $1.33 est.; Revenue $5.04B vs. $3.42B est.
- Infosys (INFY): MIXED — Net Profit ₹77.7B vs. ₹78.3B est. (miss); Revenue ₹482.1B vs. ₹483.2B est. (miss); trimmed FY27 revenue guidance
- Eli Lilly (LLY): No earnings reported — positive Phase 3 Retatrutide update
- Lockheed Martin (LMT): BEAT — EPS $7.94 vs. $7.22 est.; Revenue $20.1B vs. $19.37B est.; raised guidance
- T-Mobile (TMUS): MIXED — EPS $2.99 vs. $2.57 est. (beat); Revenue $22.8B vs. $22.95B est. (miss)
- Honeywell (HON): BEAT — Adj. EPS $1.95 vs. $1.81 est. (beat); Revenue $9.7B vs. $9.50B est. (beat); FY EPS guidance lowered, FY revenue guidance in line
- Comcast (CMCSA): BEAT — Adj. EPS $1.04 vs. $0.97 est.; Revenue $29.9B vs. $29.24B est.
- PG&E (PCG): MIXED — Adj. EPS $0.40 vs. $0.36 est. (beat); Revenue $5.9B vs. $6.20B est. (miss)
- Thermo Fisher Scientific (TMO): BEAT — Adj. EPS $6.03 vs. $5.72 est.; Revenue $12.0B vs. $11.7B est.
- Dow Inc. (DOW): BEAT — Adj. EPS $1.44 vs. $1.27 est.; Revenue $12.1B vs. $12.03B est.
- RTX Corp. (RTX): BEAT — Adj. EPS $1.89 vs. $1.66 est.; Sales $24.7B vs. $22.9B est.; raised FY EPS guidance
The batch of beats from defense contractors Lockheed Martin and RTX — both of which raised guidance — comes against the backdrop of intensifying global conflicts, while Intel's upcoming report after the close will draw attention to the semiconductor sector. Intel shares are up 178% year to date.
