Stocks Fall as Manufacturing Data Lift US Yields: Markets Wrap

(Bloomberg) — A strong reading on US manufacturing in the run-up to Jerome Powell’s speech spurred a slide in bonds on concern about sustained price pressures that could dim the outlook for Federal Reserve interest-rate cuts.

The fastest growth in manufacturing since 2022 drove Treasuries down, with 10-year yields rising five basis points to 4.34%. Fed Bank of Cleveland President Beth Hammack said she wouldn’t support easing policy if officials were making a policy decision tomorrow. The S&P 500 fell for a fifth straight day. Walmart Inc.’s profit miss overshadowed a better outlook from the retailer.

Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms.

The Fed is getting ready to kick off its economic symposium in Jackson Hole, the central bank’s flagship event. Central bankers and economists from around the world are on their way to the gathering, which will focus on structural changes in the labor market. Chair Jerome Powell will speak Friday.

“On the eve of Jerome Powell’s closely watched commentary in Jackson Hole, investors are looking for assurance from Powell that a rate cut is likely at the September meeting, in order to help prevent any further weakening of the labor market,” said Rick Gardner at RGA Investments.

That would be the Fed’s first reduction this year. A week ago, that outcome was seen as all but guaranteed, but conviction has faded and it’s now priced at a 70% likelihood.

Fed Bank of Kansas City President Jeff Schmid said he thinks inflation risks are marginally higher than risks to the labor market, though monetary policy is in a good place as policymakers consider an interest-rate adjustment next month.

“As you get closer to the optimum dual mandate numbers it actually becomes more difficult to make decisions on the margins relative to where that policy rate should go,” Schmid said in a Bloomberg Television interview aired on Thursday.

Fede Bank of Atlanta President Raphael Bostic said he still sees one interest-rate cut as likely for this year, in line with his projection in June, but added the labor-market trajectory is “potentially troubling” and bears watching.

Sharp losses in momentum stocks may present a dip-buying opportunity, according to Goldman Sachs Group Inc.’s trading desk. The traders cited rebounds after similar losses in Goldman’s High Beta Momentum basket, coupled with the current technical setup.

When the long-short momentum basket dropped 10% or more over a five-day span in the past, it proceeded to rise in the following week 80% of the time, the traders wrote in a note to clients on Tuesday. The median return was 4.5% in the next week and more than 11% in the next month.

Corporate Highlights:

Boeing Co. is heading closer toward finalizing a deal with China to sell as many as 500 aircraft, according to people familiar with the matter, a transaction that would end a sales drought that stretches back to US President Donald Trump’s last visit in 2017. Thoma Bravo has agreed to buy human resources software provider Dayforce Inc. in what is set to become one of the investment firm’s largest-ever deals. Sarepta Therapeutics Inc. landed a deal with investors to restructure around $700 million of debt, giving the company a reprieve as it recovers from a controversy over its gene therapy. WH Smith Plc slumped after the discovery of an accounting error forced it to slash its profit outlook in North America, a major setback in a key growth market for the British retailer. Some of the main moves in markets:

Stocks

The S&P 500 fell 0.2% as of 11:48 a.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 was little changed The MSCI World Index fell 0.3% Bloomberg Magnificent 7 Total Return Index fell 0.3% The Russell 2000 Index rose 0.1% Currencies

The Bloomberg Dollar Spot Index rose 0.3% The euro fell 0.3% to $1.1612 The British pound fell 0.3% to $1.3422 The Japanese yen fell 0.7% to 148.30 per dollar Cryptocurrencies

Bitcoin fell 1.3% to $112,883.9 Ether fell 2.4% to $4,253.03 Bonds

The yield on 10-year Treasuries advanced five basis points to 4.34% Germany’s 10-year yield advanced four basis points to 2.76% Britain’s 10-year yield advanced six basis points to 4.73% Commodities

West Texas Intermediate crude rose 0.8% to $63.23 a barrel Spot gold fell 0.1% to $3,344.84 an ounce ©2025 Bloomberg L.P.