- US stocks traded mixed Monday while the 10-year Treasury bond yield reached a new 2024 high.
- Markets think the odds of a June rate cut have declined to about 50-50.
- Wednesday's CPI data will be a key data point to inform the path of Fed policy.
US stocks were mixed at the end of Monday's trading session as equity markets hit the brakes on a five-month rally and readjusted interest rate expectations.
Equities' modest gain on the day is a continuation of last week's shifting market sentiment after hotter-than-anticipated economic readings triggered a considerable pullback. Strong data also sent long-dated Treasury yields soaring, with the 10-year rate hitting a 2024 high on Monday of 4.42%
Friday's stunning jobs report further scrambled the view of rate cuts this year. The data showed that 303,000 jobs were added in March, blowing past expectations. With the economy still resilient, the need for the Fed to cut rates to boost growth and avert a downturn has dwindled.
Now, markets see the odds of a June cut as coming down to about 50-50, CME FedWatch data shows.
As markets await more clues of the Fed's future action, most will focus on Wednesday's consumer price index report.
"Consensus forecasts monthly rises in both the headline and core readings at 0.3%. Even though these are a tick lower than the February print, they are still too high to bring inflation closer to the Fed's 2% target in the near term," Jamie Dutta, market analyst at Vantage, said. "That means the early inflation noise that kicked off the year continues to linger and is not a good sign for those clamoring for a rate cut at the end of this quarter."
A slew of Fed officials will also be speaking this week, including New York Fed President John Williams and Boston President Susan Collins, who will both speak on Thursday. Markets will also be parsing the minutes of the March policy meeting, set to publish on Wednesday.
Here's where US indexes stood at the 4:00 p.m. closing bell on Monday:
- S&P 500: 5,202.39, down 0.04%
- Dow Jones Industrial Average: 38,892.80, down 0.03% (-11.24 points)
- Nasdaq Composite: 16,253.96, up 0.03%
Here's what else happened today:
- A number of recession indicators are flashing red, economist David Rosenberg warns.
- Gold could rally another 50% into 2025, according to Ed Yardeni.
- Rapid rise of private credit might be driving systemic risk, IMF cautions.
- TSMC rises after a $11.6 billion chipmaking deal with the US to boost production.
- Recession odds are now at a 2-year low, Bankrate says.
- Investors are too optimistic amid geopolitical turmoil and inflationary era, Jamie Dimon wrote in shareholder letter.
In commodities, bonds, and crypto:
- Oil prices fell. West Texas Intermediate crude oil slumped 0.4% to $86.53 a barrel. Brent crude, the international benchmark, slipped by 0.7% to $90.53 a barrel.
- Gold gained 0.4% $2,339.98 per ounce.
- The 10-year Treasury yield rose four basis points to 4.42%.
- Bitcoin increased by 3.6% to $71,859.