US Treasury prices fell as oil prices surged amid escalating tensions with Iran. President Donald Trump set a late-Tuesday deadline for Iran to agree to terms ending American attacks, creating market uncertainty. The selloff in Treasuries reflects growing concerns about geopolitical risk and its potential impact on inflation and interest rates.

Oil prices climbed as traders assessed the implications of the US-Iran standoff. Higher energy costs typically weigh on bond prices, as investors anticipate inflationary pressures and potential Federal Reserve policy responses. The market is closely watching Trump's deadline, which could trigger further volatility in both energy and fixed-income markets.

The Treasury auction scheduled amid these tensions will be closely scrutinized for demand indicators. Investors are weighing the balance between safe-haven buying and inflation concerns. The outcome could signal broader market sentiment about the economic impact of escalating Middle East tensions.