CENTCOM said on social media that at 11:00 p.m. ET yesterday U.S. forces successfully intercepted two Iranian ballistic missiles aimed at U.S. troops in Kuwait. Both missiles were promptly shot down and there were no U.S. casualties reported.

Signs of a breakdown in US-Iran talks pushed US Treasury prices lower as worries that higher energy costs could lift inflation and force Fed rate hikes increased. Monday’s selloff lifted yields across the $31 tln US Treasury market: the 10-year yield rose about 6 bps to around 4.50% and crude oil gained more than 7%. The 2-year, most sensitive to Fed policy, rose roughly 6 bps to 4.07%. Iran suspended intermediary talks with the US in protest of Israeli action. Traders raised odds the Fed’s next move will be a hike; Fed swaps show markets are fully pricing one hike by March 2027 and assign about a 50% chance of a move as soon as October.

Israel Defense Forces said air-raid alerts sounded across multiple areas in northern Israel over suspected hostile aircraft incursions; the situation is under review.