On May 4, 2023, U.S. Treasury yields experienced a notable increase, with the benchmark 10-year yield rising 7 basis points to 4.448%, its largest daily rise in nearly six weeks. This surge was primarily attributed to escalating tensions in the Middle East, particularly following Iranian attacks on the United Arab Emirates and vessels in the Strait of Hormuz. As a result, crude oil prices soared, with U.S. crude climbing 4.5% to $106.53 per barrel and Brent crude rising 5.88% to $114.54. Analysts have expressed concerns about inflation, leading Barclays to revise its forecast, now expecting no rate cuts from the Federal Reserve this year, contrary to earlier predictions of a 25-basis-point cut in September. The rise in yields reflects market apprehension regarding prolonged high energy prices and their impact on inflation. Additionally, U.S. factory orders rose 1.5% in March, surpassing expectations and indicating strong economic activity. The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) reached 2.805%, the highest since August 2022, signaling increased inflation expectations among investors.