US Treasuries clawed back earlier losses during Tuesday's morning session, helped by a large block trade in long-dated Treasury futures that appeared to curb the momentum of the yield curve steepening.

WTI futures remained broadly steady near three-week highs, as the standoff between the US and Iran over control of the Strait of Hormuz continued unresolved.

Corporate bond issuance for the day ultimately saw three issuers raise $6.4 billion, coming in below market expectations for the session's supply. However, supply pressure will persist into Wednesday, with a $16 billion auction of 20-year Treasury Inflation-Protected Securities scheduled, where the awarded yield is expected to reach the highest level for that tenor since its reintroduction in May 2020.

Just after 3 p.m. New York time, the long end of the Treasury curve fell by up to 2.5 basis points, while short-term yields saw little change. On the day, the 2-year/10-year and 5-year/30-year spreads narrowed by 1.2 basis points and 1.5 basis points, respectively.

The 10-year yield traded in a range during the thinly traded US afternoon, ultimately finishing nearly 2 basis points lower, close to its intraday low. During the US morning session, a $290k DV01 block buy in long-dated Treasury futures seemed to halt the earlier bearish steepening of the curve.

The contract traded near 109-20 late in the session; based on the buy price of 109-03, the buyer of the block was sitting on a paper profit of roughly 17 ticks by the close. US equities moved lower late in the day, led by technology stocks, with chip names sold off heavily—a closely watched semiconductor index fell 5.5%.

Late in the session, WTI futures rose about 0.5%. Brent crude settled near $91 per barrel, up 15% cumulatively since the start of August.