The S&P 500 reaches 6,600 as bond yields drop ahead of the Fed – US Market Wrap
Wall Street began the week on a positive note, with traders viewing a Fed rate cut on Wednesday as a foregone conclusion while waiting for confirmation on bets on a series of cuts that would extend into next year.
The $14 trillion rally that has propelled US equities to all-time highs is nearing an endpoint, with the first rate cut since Trump took office expected to take center stage in a week that will determine policy settings for half of the world’s ten most-traded currencies.
Equities continued their record-breaking run, with the S&P 500 reaching 6,600. Tesla’s 3.6% gain erased its 2025 losses after Musk purchased $1 billion in shares. Alphabet has reached $3 trillion. A framework agreement to keep TikTok running in the United States also boosted sentiment, with Trump stating that he would speak with Chinese President Xi on Friday.
Treasuries rose, with two-year yields nearing their lowest level since last September. The dollar dropped.
Signs of labor-market weakness, combined with no major shocks in inflation, clinched the deal for what money markets predict would be a quarter-point Fed decrease in September. The real concern, however, will be the pace of lowering following the decision, given that prices remain persistently above the central bank’s objective.
