As Bond Yields Rise, Stock Buyers Experience Fatigue. – US Market Wrap

A solid week on Wall Street finished on a tranquil note, with stocks holding near all-time highs and bonds tumbling as consumer data did nothing to change betting that the Federal Reserve will lower rates in September.

Following a relentless surge, the S&P 500 barely moved. The IPO market ramped up this week, with deals raising more than $4 billion in the busiest period since 2021. A megacap index rose on Friday, led by Tesla.

Treasuries fell slightly, limiting the market’s fourth straight week of gains and the dollar experienced its steepest weekly decline in about a month.

Consumer sentiment fell to its lowest level since May, while long-term inflation expectations rose. This comes after recent data showing a slowing labor market, with investors leaning heavily toward three rate cuts this year.

According to economists polled, cracks in the job market will likely prompt the Fed to start cutting interest rates next week. The median respondent expects two cuts by year-end, but more than 40% anticipate three rate cuts.