Traders work on the floor of the New York Stock Exchange during afternoon trading on October 03, 2024 in New York City.
U.S. Treasury yields were mixed on Tuesday as investors readied themselves for the presidential election results.
The 10-year Treasury yield slipped 2 basis points at 4.289% after giving up its gains in afternoon trading. The yield on the 2-year Treasury was also up roughly 2 basis points at 4.197%.
One basis point is equivalent to 0.01%. Yields and prices have an inverted relationship.
The moves for yields come as U.S. citizens are voting on Tuesday in the hotly anticipated presidential election. The race between Vice President Kamala Harris and former President Donald Trump is expected to be tight.
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Follow: Election 2024 live updates: Trump and Harris await Presidential election results
Investors will also be paying close attention to which party takes control of Congress, as a division of power in Washington could make it harder for either presidential candidate to enforce their policies. A clean sweep by either Republicans or Democrats, on the other hand, could result in big changes to spending or tax policy.
The benchmark 10-year Treasury yield has been trending higher in recent weeks after trading below 3.8% as recently as early October.
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Beyond the election, John Luke Tyner, head of fixed income at Aptus Capital Advisors, told CNBC that inflation is still front-of-mind for bond investors and those worries could explain some of the recent volatility for Treasury yields.
"I think definitely you got some of the swings politically as different candidates were charging in the polls. But I think at the end of the day a lot of the data has continued to point toward a soft-landing," Tyner said.
"There's an asymmetry toward [The Federal Reserve] cutting a lot more than cutting less if the data turns down, and I think that the market sees that as potentially them risking, by getting a little bit aggressive with the cuts, maybe not sort of putting out the inflation fire that was started after Covid," he added.
Yields briefly ticked higher during the day after the Institute for Supply Management's October reading for services came in stronger than expected.
The services purchasing managers' index came in at 56.0, the highest reading since July 2022. Economists surveyed by Dow Jones were expecting a reading of 53.7.
Later this week, the Fed will hold its policy meeting on Thursday. Traders are pricing in a 99% likelihood of a quarter-point cut, according to the CME Group's FedWatch Tool, following a half-point jumbo rate cut in September.
