Stocks and bonds dropped around the globe as solid economic readings and a rally in commodities spurred speculation that major central banks will keep interest rates higher for longer.
In a revival of the “good news is bad news” trade, better-than-estimated data on US job openings and factory goods orders added to skepticism about the pace of Federal Reserve easing. With traders now projecting fewer rate cuts than the Fed itself, 10-year yields hit the highest levels in 2024. That weighed on the equity market — which had been ignoring the repricing of central bank bets in the last few months amid a torrid rally.
“Stock bulls may find it difficult to justify buying stocks at these elevated levels as yields rise,” said Fawad Razaqzada at City Index and Forex.com. “Rising crude oil prices pose additional risk to the inflation outlook. Additionally, numerous job reports are expected throughout the week. Trading could be volatile.”
Rita Nazareth | Yahoo Finance