Stocks took a hit as bond prices slid, raising concerns about increasing supply and rising yields. The US sold $44 billion of seven-year notes at a higher rate than expected, following tepid demand in previous offerings. This trend is affecting various asset classes and highlighting uncertainties over Fed policy as inflation remains stubbornly high.
Treasury 10-year yields rose, pushing the S&P 500 below 5,300. American Airlines and UnitedHealth Group saw declines, while BHP Group abandoned its bid for Anglo American Plc. Marathon Oil surged as ConocoPhillips announced a $17 billion deal.
Global bond issuance has surpassed previous records, with German bond yields hitting a six-month high due to accelerating inflation. Australia’s inflation readings suggest high rates will persist. The upcoming Beige Book survey and Fed Chair Jerome Powell’s cautious stance on rate cuts are adding to market jitters.
Despite expectations for lower US sovereign yields by year-end, the options market predicts muted swings in the S&P 500 following bond auctions and key economic data releases. Bank of America clients were net sellers of US equities for the fourth consecutive week, with hedge funds increasing exposure to tech giants like Nvidia.
Corporate highlights include Exxon Mobil’s shareholder meeting, Abercrombie & Fitch’s strong sales, Dick’s Sporting Goods’ raised outlook, Robinhood’s share repurchase plan, and Lenovo’s bond sale to Saudi Arabia’s sovereign wealth fund.
Key events this week include Eurozone economic data, US jobless claims and GDP, and speeches from Fed officials. Market movements show declines in stocks, a rise in the dollar, and mixed results for cryptocurrencies and commodities.
Overall, the market remains cautious amid uncertainties over inflation, Fed policy, and global economic conditions.
