Stocks Rise on Dovish Rate Bets; Bond Rally Pauses – Europe Market Wrap

Stocks rose on optimism that a weakening economy will allow the Federal Reserve to decrease interest rates this year. Treasuries halted a surge that had resulted in the largest two-day drop in rates this year.

Contracts for the S&P 500 surged as the underlying gauge finished only 0.6% below its all-time high set in May. The 10-year Treasury yield increased two basis points to 4.35%.

Markets are shifting their focus to a series of labor-market measures this week, particularly Friday’s US employment report, for more signals on when the Fed may lower interest rates. Private payroll statistics and the newest report on the US sen/ices sector will be released later Wednesday.