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Posted June 26, 2026 at 11:30 am
In this market commentary, Jim Iuorio of TJM Institutional Services breaks down the recent fluctuations in the bond market. Before the conflict, 10-year yields sat below four percent, but quickly surged to a high of 4.67 percent by late May. This aggressive move higher was largely driven by fears that spiking oil prices would permanently embed stubborn inflation, alongside growing anxiety over the massive wave of new bonds the government would need to issue to finance geopolitical responses.
However, the narrative has recently shifted. Yields have retreated closer to 4.43 percent, catalyzed by a sharp drop in WTI crude oil prices back to $75 a barrel. This pullback signals that the worst of the recent inflation spike might be behind us, making longer-term bonds more attractive. Iuorio highlights how this shift is clearly reflected in two-year breakeven expectations, which dropped alongside oil from 3.00 percent down to 2.75 percent.
Despite this relief, lingering concerns remain about future government spending and bond issuance. With all eyes now turning to the June 25th economic data releases, including Q1 GDP and the May PCE Price Index, Wall Street is searching for a definitive signal. Will the GDP numbers show an economy that has weathered the recent oil volatility, or are deeper cracks beginning to show? Watch for key insights into how retail traders can navigate these macroeconomic crosscurrents.
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