Back To a Win Streak- US Market Wrap

The stock market struggled to gain much traction after data pointed to an economy that is slowing amid stubborn inflation, posing a challenge to the outlook of Federal Reserve rate cuts.

Equities wavered and bond yields rose following a report that showed US consumer sentiment declined to a six-month low as short-term inflation expectations picked up. While a slowdown in key sectors has encouraged bets on Fed easing, a chorus of officials continued to echo the higher-for-longer mantra as they try to bring inflation back to the 2% target.

The S&P 500 hovered near 5,220, while notching its third straight week of gains, the longest winning streak since February. The Dow Jones Industrial Average rose for an eighth straight session.

Treasury 10-year yields advanced five basis points to 4.50%. Fed swaps showed traders have fully priced in a rate cut by November, and a second reduction by the January meeting.
Fed’s Logan noted it’s still too early to think about lowering borrowing costs, while Fed’s Bowman said she doesn’t expect it will be appropriate for the Fed to cut interest rates in 2024, pointing to persistent inflation in the first several months of the year.

In other Fedspeak, Goolsbee said he doesn’t think inflation is stuck above the central bank’s target despite recent data showing price pressures picked up at the start of the year.