U.S. Treasury yields climbed Tuesday, with the 10-year note rising 1.4 basis points to 4.492%, as renewed tensions in the Middle East and higher oil prices fueled safe-haven demand for the dollar. The DXY dollar index edged up 0.1% to 100.971. Analysts suggest a re-escalation of Mideast conflict could pressure inflation through energy costs.

Global bond markets mirrored the trend, with the 10-year German Bund yield reaching a two-week high of 2.974% and U.K. gilts hitting a similar two-week peak of 4.823%. Germany's rising net funding needs, projected to exceed 1 trillion euros by 2030, contributed to the upward pressure on European yields.

Traders are also anticipating the Federal Reserve's June meeting minutes, due Wednesday, which could influence expectations for a potential U.S. interest rate hike by year-end. Meanwhile, a $58 billion auction of three-year Treasury notes faced scrutiny from J.P. Morgan strategists, who predicted it might require a concession to be absorbed smoothly given current valuations.