After moving modestly higher in early trading, treasuries came under pressure over the course of the trading day on Friday.
Bond prices slid firmly into negative territory but climbed off their lows going into the close. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4 basis points to 2.164 percent.
With the moderate increase on the day, the ten-year yield ended the session at its highest closing level in over a year.
The early strength among treasuries was partly due to the release of a report from the Commerce Department showing an unexpected drop in personal spending in the month of April.
The report said personal spending dipped by 0.2 percent in April after inching up by a revised 0.1 percent in March. Economists had expected spending to come in flat.
However, treasuries turned lower on the day following the release of a pair of better than expected reports on Chicago-area business activity and U.S. consumer sentiment.
The ISM Chicago released a report showing that its Chicago business barometer surged up to 58.7 in May from 49.0 in April, with a reading above 50 indicating an increase in business activity. Economists had been expecting the barometer to edge up to 50.0.
With the much bigger than expected increase, the Chicago business barometer reached its highest level since March of 2012 after hitting a three-and-a-half-year low in April.
Thomson Reuters and the University of Michigan released a separate report showing that consumer sentiment improved by even more than previously estimated in the month of May
The report showed that the consumer sentiment index for May was upwardly revised to 84.5 from the preliminary reading of 83.7. Economists had expected the index to be unrevised. The index is now well above the final April reading of 76.4 and at its highest level since July of 2007.
Economic data is likely to remain in focus next week due to lingering uncertainty about the outlook for the Federal Reserve's asset purchase program.
While next Friday's monthly employment report is likely to attract the most attention, traders are likely to keep a close eye on reports on construction spending, labor productivity, and manufacturing and service sector activity in the days leading up to the jobs report.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.