The Treasury market this week saw its biggest single-day rally since the collapse of Silicon Valley Bank

• US Treasurys this week saw the biggest single-day rally since SVB collapsed.
• The yield on the 10-year US Treasury fell 15 basis-points on Tuesday.

The US Treasury market saw its biggest single-day rally this week since the collapse of Silicon Valley Bank in March, a sign that extreme bond pessimism may be waning amid hopes that the Federal Reserve is close to the end of its rate hike campaign and amid a flight to safe haven investments as war breaks out between Israel and Hamas.

The yield on the 10-year US Treasury note slid 15 basis points to 4.647% on Tuesday. That's the steepest one-day decline the 10-year Treasury yield has seen since the implosion of SVB in early March, when banking turmoil led investors to flock to US debt in search of safety.

The 10-year Treasury yield continued to slide early Wednesday, trading around 4.577%. Yields also dropped for the 20-year and 30-year Treasury bonds, which both inched lower by about nine basis basis points to trade around 4.93% and 4.732% respectively.

Bond prices, which move inversely to yields, are up. The iShares 7-10 Year Treasury Bond ETF has inched up 1% higher from Friday's close, trading around $91.29 on Wednesday.

Investors were pushed to sell US Treasuries last week amid rising fears over the US debt balance and higher-for-longer interest rates. The 10-year Treasury yield briefly touched a 16-year-high, capping one of the worst selloffs in market history.

Demand for US bonds began to pick up over the weekend after Hamas's deadly attack on Israel, causing investors to flock to US Treasurys and other safe haven investments.

Meanwhile, several Fed officials delivered dovish comments on the outlook for interest rates this week, which perked up market sentiment. Atlanta Fed President Raphael Bostic, in particular, suggested that future interest rate hikes may not be necessary to lower inflation. Others have noted that high bond yields may be doing the Fed's job of trying to tighten financial conditions to cool the economy.

Investors are awaiting September's Consumer Inflation Report on Wednesday, which will hint at the next policy move by the central bank.