Treasuries gained momentum Tuesday as the U.S. bond market resumed trading after a holiday, pushing the 10-year Treasury yield toward 4%. The rally, driven by renewed investor demand for safer assets, follows a mixed reaction to recent economic data. Markets had been volatile during the holiday hiatus, with uncertainty over Federal Reserve policy and inflation trends lingering.

The reopen injected liquidity into the market, with traders recalibrating positions ahead of key economic releases. Deal values surged as institutional investors sought to hedge against potential rate hikes, though the yield’s decline remained modest compared to earlier rallies. Analysts noted the 10-year yield’s trajectory reflects a cautious outlook, with investors balancing optimism about economic resilience against risks of prolonged tight monetary policy. Market participants are now closely monitoring Federal Reserve statements and inflation metrics, which could dictate the bond market’s next move.