06/11/2026
This morning, the market was focused on comments from President Trump regarding potential air strikes that were reportedly planned for today. Bonds reacted, but not aggressively. There was still a healthy dose of skepticism that we've seen time and time again with similar headlines.
That skepticism turned out to be warranted.
At approximately 1:30 PM ET, Trump announced that the planned strikes had been canceled, that all parties had agreed to a deal, and that a time and place for signing would be announced shortly. Unlike previous announcements, there wasn't an immediate wave of contradictory reports from foreign sources pushing back on the claims.
Markets responded quickly.
Stocks surged, oil prices fell sharply, and the bond market rallied hard. The 10-year Treasury yield dropped another 8 basis points, bringing the total improvement on the day to more than 10 basis points. Mortgage-backed securities followed suit, prompting almost every lender to issue positive reprices.
Now comes the waiting game. Markets have heard versions of this story before. If the deal holds together, today's move makes sense. If new headlines emerge that challenge the narrative, volatility could return just as quickly.
For now, bonds are choosing to believe.