US Treasuries strengthened, with a drop in crude oil prices alleviating inflation concerns and temporarily reducing pressure on Treasury Secretary Scott Bessent, who has been striving to curb a multi-month selloff that had previously pushed long-dated yields to their highest levels in nearly two decades. Yields across maturities fell 2 to 4 basis points as optimism over cooling tensions in the Middle East drove oil prices lower.

Since Bessent announced last week an expansion of Treasury buybacks aimed at lowering long-term rates, the 30-year bond yield has declined approximately 9 basis points to 5.19%. Dan Carter, senior portfolio manager at Fort Washington Investment Advisors, noted that Tuesday's bond market gains reflected lower energy prices and "the continued spillover effect of the Treasury Department's measures to support the bond market." "Buybacks certainly don't solve long-term problems, but the signal they send is important," he added.

This week, traders will monitor auctions of 5-year and 7-year Treasuries to gauge investor demand, while also watching a key inflation reading due on Wednesday. The market focus will culminate on Friday with a major speech by Federal Reserve Chairman Kevin Warsh at the annual Jackson Hole symposium.