U.S. Treasury yields were relatively unchanged on Monday after the U.S. and Iran again exchanged military strikes, further clouding the prospects for a deal to end the conflict.

The 10-year Treasury yield— the key benchmark for mortgages, auto loans and credit card debt — was up less than 1 basis point at 4.457%.

Yields on the 2-year Treasury note, which often move in reaction to short-term Federal Reserve rate decisions, were more than 1 basis point higher at 4.033%.

The 30-year bond yield, meanwhile, fell more than 1 basis point to 4.981%.

One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.

Borrowing costs edged higher after U.S. and Iranian air strikes over the weekend, with each side exchanging fire close to the strategically important Strait of Hormuz shipping channel.

Bond yields had steadied on Friday as traders closed out the month with an eye on geopolitical developments, amid signs that the U.S. and Iran were nearing a ceasefire extension.

But fresh uncertainty over the direction of the conflict pushed oil prices higher on the first day of June. Prices of West Texas Intermediate futures jumped 3% to around $90 per barrel, while Brent crude, the international oil price benchmark, was up 3% at around $93 per barrel.

Later, the Institute for Supply Management will release its latest manufacturing index for May, as investors continue to probe data for signs of rising costs within the U.S. economy.

The ISM's manufacturing PMI is expected to come in at 53, according to consensus forecasts, up from April's 52.7 print, which itself was unchanged from March — the highest level since April 2022.

Elsewhere, former Federal Reserve chair Jerome Powell warned in a speech that moves by the Trump administration to push the central bank towards lower interest rates risk damaging the public's faith in the institution's independence.