Market Summary
Treasuries Sell Off as US Growth and Oil Prices Raise Rate Expectations: US Treasuries suffered their worst sell-off since President Trump’s “Liberation Day” announcements following a stronger-than-expected US PMI reading and gains in oil prices. Five-year yields breached 5% for the first time since 2007 as markets raised the probability of an October Fed rate hike to 71%. Yesterday’s economic report pointed to strong momentum across US manufacturing and services against a backdrop of resurgent energy prices and weak demand at recent Treasury auctions.
Dollar Strengthens as Global Bond Yields Rise: The dollar strengthened as yields rose, while bonds also sold off elsewhere, with Japanese and emerging-market debt sliding. Brent crude reached a session high of $103.79, while gold edged lower as higher yields increased the appeal of fixed-income assets.
Equities Fall Ahead of Trump-Xi Talks: US Treasury Secretary Scott Bessent unveiled a two-month extension to the US-China trade truce as President Xi arrived in the US for bilateral talks. Equities nevertheless came under pressure from rising yields, with the MSCI Asia Pacific Index falling 0.6%. S&P 500 futures pointed to a weaker open, while attention now turns to second-tier US employment data this afternoon and comments from several Fed speakers.
Key Market Moves Today
- S&P 500 Futures: -0.37% (7,743)
- Brent Crude: +2.21% ($105.34)
- Spot Gold: -0.35% ($4,271)
- US 10-Year Treasury Yield: 5.12%
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