Iran talks stall and Treasury yields hit a 19-year high

Good morning. The week opened on a sour note. President Trump turned down Iran's offer to reopen the Strait of Hormuz, oil bounced back, and the 10-year Treasury yield climbed to 5.24%, its highest in 19 years.

War is only part of the story. Pricier oil stokes inflation worries, and swelling government deficits mean there are fewer eager buyers of bonds. Fed Governor Lisa Cook added that the AI building boom could keep prices under pressure for months, which doesn't suggest relief for yields any time soon. Germany's 10-year yield also hit its highest level since 2009.

The mood before the opening bell was heavy. Dow futures were down more than 300 points, with rate-sensitive tech taking the worst of it. Chip stocks wobbled too after OpenAI said it paused training its most advanced models to review them following an incident. JPMorgan, for its part, argued the pullback has made chips worth another look.

One bright spot: the US and China agreed to cut tariffs on $30 billion of goods each, covering everyday items like toys and sporting goods. Rare earths, though, remain unresolved.