The 10-year Treasury yield experiences a slight decline, yet remains below 2%, as investors keep a watchful eye on the ongoing Russian invasion.

On Thursday, the U.S. Treasury yields experienced a significant turnaround, reversing losses caused by the Russian invasion of Ukraine.

The benchmark yield decreased by 1 basis point to 1.965% in afternoon trading, while shorter-term yields experienced larger declines. However, the yield on the ticked up by less than a basis point to 2.279%.

Prices move inversely with yields, and 1 basis point is equivalent to 0.01%.

In early trading, investors rushed to government bonds as treasury yields plummeted sharply. Gold and oil prices surged, with the 10-year and 30-year yields declining more than 10%.

Those who reversed course later in the day mirrored dramatic turnarounds in other markets like U.S. equities.

Mark Heppenstall, president and chief investment officer at Penn Mutual Asset Management, said that the immediate reaction was extreme, especially considering the odds were high that this would happen at some point.

The escalating conflict in Ukraine has led to rising oil prices, which could complicate the Federal Reserve's strategy of hiking interest rates to control inflation.

According to Nuveen, it is likely that higher energy prices will result in inflationary pressure, which will increase the pressure on the Fed to raise interest rates. However, the Fed may be hesitant to increase rates during periods of market volatility.

The Fed is expected to increase interest rates by 25 bps in March, as it must maintain consistency in its messaging and take some action. However, any Fed decision or non-decision could result in increased volatility.

On Thursday afternoon, President Joe Biden announced expanded sanctions for Russian banks and financial elites, condemning the attack and stating that "the world will hold Russia accountable."

The 10-year yield for Russian government Treasurys jumped above 12%.

Last week, the number of initial jobless claims filed in the U.S. decreased to 232,000, slightly better than anticipated.

— CNBC’s Tanaya Macheel contributed to this market report.