10-year Treasury yield rebounds after hitting its lowest level in more than a year

Treasury yields bounced back on Tuesday as investors closely monitored a reversal of the previous day's global market sell-off.

The yield on the benchmark 10-year Treasury note traded more than 5 basis points higher at 3.836% at 11:20 a.m. ET. It comes after the yield on the 10-year Treasury note on Monday fell to its lowest level since June 2023.

The yield on the 2-year Treasury note advanced nearly 7 basis points at 3.948%. Yields and prices move in opposite directions, and one basis point is equivalent to 0.01%.

The Commerce Department reported Tuesday that the U.S. trade deficit fell less than expected in June.

The goods and services shortfall fell to a seasonally adjusted $73.1 billion, down $1.9 billion from May but above the Dow Jones estimate for $72.5 billion. Exports rose $3.9 billion, while imports, which subtract from GDP, were up $2 billion.

Meanwhile, global markets appeared on track to shake off Monday's dramatic downturn.

U.S. stocks kicked off the month sharply lower as fresh data prompted fears of a worsening economic outlook. The weaker-than-expected data led investors to worry that the Federal Reserve may be behind the curve in cutting interest rates to fend off a recession.

However, all three major averages partially rebounded and rose roughly 1% as of Tuesday morning.

The Federal Reserve held interest rates steady at its recent July meeting, although Fed Chair Jerome Powell gave investors some hope by signaling a September rate cut is on the table. Speaking Monday, regional Fed Presidents Mary Daly of San Francisco and Austan Goolsbee of Chicago both gave indications that rate cuts are on the horizon without specifying when and to what degree.

Traders are now pricing in a 65% chance of the central bank