US Treasury yields climbed as higher oil prices offset disappointing July retail sales, which contracted 0.6% month-over-month.
The US 10-year Treasury yield rose over 4 basis points to 4.692% on Friday, driven by higher oil prices despite weaker-than-expected retail sales. West Texas Intermediate crude gained 1.50%, trading at $82.39.
US Retail Sales fell 0.6% in July, missing forecasts of 0.1% growth and down from June’s 0.2% rise. The decline was led by a drop in online sales after Amazon’s Prime Day shifted to June, along with lower gasoline prices. Consumer sentiment also weakened, with the University of Michigan index dropping to 51.0 in August.
The US Dollar Index (DXY) fell 0.31% to 99.63, while the 2-year Treasury yield briefly dipped before recovering. Markets now price a 63% chance of a Fed rate hike by December 2026.