Treasury Yields Rise as Data Keep Fed Bets in Play: Markets Wrap

(Bloomberg) — Wall Street traders sent bonds lower and stocks wavered, with the latest economic reports doing little to alter bets the Federal Reserve will raise interest rates this year.

While US consumer spending stalled and a key price gauge rose in line with expectations, separate data showed solid economic expansion. Money markets fully priced in a Fed hike by December. Short-dated Treasuries underperformed. The S&P 500 fluctuated, with traders awaiting Nvidia Corp.’s results. Oil fell as Iran and Oman discussed a deal to revive the Strait of Hormuz.

With markets remaining sensitive to anything that could boost the odds of higher rates, the latest economic numbers weren’t necessarily what they wanted to see, according to Ellen Zentner at Morgan Stanley Wealth Management.

The data wasn’t enough to shift the balance for the September Fed meeting, but if subsequent figures point in the same direction, the central bank may feel more pressure to move off the sidelines, she said.

“The challenge is becoming increasingly clear: Inflation is still too high for comfort, and investors will be watching to see whether Fed Chair Kevin Warsh uses Friday’s Jackson Hole speech to address how policymakers plan to bring it back toward the Fed’s long-term target,” said Bret Kenwell at eToro.

“We’re still a long way from being out of the inflation hot water,” said Sonu Varghese at Carson Group.

The economy remains strong and inflation isn’t dropping, noted David Russell at TradeStation. Strong consumption, spending and durable goods orders suggest the Fed has room to tighten without causing a recession, he added.

“These numbers support hawkish policymakers at the Fed’s committee and increase pressure on Kevin Warsh later this week,” Russell said. “It’s getting harder for him to dodge the issue of hiking rates.”

Aside from the economic picture, Wall Street is eagerly anticipating Nvidia’s earnings, not so much for what the numbers will say about the chip giant, but for what they mean to artificial intelligence investors and the market itself.

Analysts project that revenue nearly doubled from a year ago, which would be the fastest pace in two years, as did net income, according to data compiled by Bloomberg.

Corporate Highlights:

Meta Platforms Inc. has agreed to pay up to $16.7 billion to settle a landmark social media case with multiple US states, according to a court filing Wednesday. Zoom Communications Inc. gave a sales outlook for the current quarter that was about in line with analysts’ estimates, disappointing investors hoping for a greater uplift from its expanded suite of products. Kohl’s Corp.’s turnaround attempt showed some progress after the retailer raised its annual earnings outlook, but it still doesn’t see sales growth this year. JM Smucker Co. raised its full-year outlook for sales and profit, buoyed by growth in its Uncrustables sandwiches and coffee. Abercrombie & Fitch Co.’s revenue topped estimates and the retailer raised its annual earnings guidance, suggesting the preppy apparel company is regaining some momentum even after another quarter of slow sales growth. Some of the main moves in markets:

Stocks

The S&P 500 rose 0.1% as of 10 a.m. New York time The Nasdaq 100 rose 0.2% The Dow Jones Industrial Average was little changed The Stoxx Europe 600 rose 0.3% The MSCI World Index rose 0.1% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1653 The British pound fell 0.3% to $1.3602 The Japanese yen fell 0.1% to 159.39 per dollar Cryptocurrencies

Bitcoin rose 0.2% to $78,323.74 Ether rose 0.7% to $2,454.06 Bonds

The yield on 10-year Treasuries advanced three basis points to 4.66% Germany’s 10-year yield advanced two basis points to 3.22% Britain’s 10-year yield advanced three basis points to 5.01% Commodities

West Texas Intermediate crude fell 1.1% to $81.42 a barrel Spot gold fell 0.5% to $4,632.39 an ounce ©2026 Bloomberg L.P.