U.S. Treasury yields fell to start the week as investors weighed President Donald Trump's latest tariffs after the Supreme Court struck down much of the duties on Friday.
The 10-year Treasury yield was down more than 5 basis points at 4.031%. The 30-year Treasury bond yield was more than 2 basis points lower at 4.70%. The 2-year Treasury note yield pulled back 4 basis points to 3.44%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
On Friday, the Supreme Court invalidated a huge portion of Trump's "reciprocal" tariffs in a 6-3 ruling, in which they said that the president wrongfully used the International Emergency Economic Powers Act (IEEPA) to enforce tariffs. They said that the law that underpins the import duties "does not authorize the President to impose tariffs."
Despite this, Trump retaliated Saturday and said he's raising global tariffs to 15% from 10%. He also said the new rate would be "effective immediately" and that additional levies would follow.
"I, as President of the United States of America, will be, effective immediately, raising the 10% Worldwide Tariff on Countries, many of which have been "ripping" the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15% level," Trump wrote in a post on Truth Social.
Trump then said Monday that countries that plan to "play games" after the Supreme Court's rebuke "will be met with a much higher Tariff, and worse, than that which they just recently agreed to," which exacerbated the risk-off stance among investors.
"Sometimes the market just wants an excuse to sell off a little bit," said Stephen Tuckwood, director of investments at Modern Wealth Management. "What we've been encouraged about is the reaction of the U.S. dollar and the 10-year Treasury both behaving themselves really well, which is very different to the original tariff announcement back last April."
The 10-year Treasury yield briefly dropped below the 4% level in the wake of Trump first announcing his wide-ranging tariff policy in early April 2025. Given that the current level of the benchmark yield, as well as the U.S. dollar, Tuckwood believes there isn't anything "too big to be worried about here."
In addition to monitoring the latest tariff situation closely, investors are awaiting some economic data this week, including the release of the producer price index on Friday.