Stocks Halt Rally as Weak Bond Sale Lifts Yields: Markets Wrap

(Bloomberg) — Wall Street halted a rally that drove stocks to the brink of a record amid concerns about an overheated market. Treasuries lost steam as a weak sale of 30-year debt signaled waning appetite after a bond surge.

Following an almost 30% advance from its April lows, the S&P 500 closed little changed. A gauge of chipmakers jumped, but Intel Corp. slipped 3% as President Donald Trump called on its chief to resign, citing conflicts of interest. Eli Lilly & Co. tumbled 14% after disappointing data on its new weight-loss pill. Apple Inc. extended a two-day gain to about 8.5%.

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Thursday’s $25 billion Treasury sale followed poor results for three- and 10-year debt auctions this week. Long-end gains faded, leaving 30-year yields little changed at 4.83%. The yield on 10-year bonds rose two basis points to 4.25%. The dollar barely budged.

Whether or not the blistering rally in American equities is about to cool, some big firms have warned clients to prepare for a near-term pullback amid sky-high valuations. Added to bulls’ worries is seasonality. August and September have historically been the two worst months for the S&P 500.

“We talk about the potential for ‘air pockets’ in this current environment based primarily on headline risk, which remains elevated in our view,” said Dan Wantrobski at Janney Montgomery Scott. “This renders them vulnerable to pullbacks as we enter the second half of 2025.”

Meantime, Federal Reserve Governor Christopher Waller is emerging as a top candidate to serve as the central bank’s chair among President Trump’s advisers as they look for a replacement for Jerome Powell, according to people familiar with the matter.

Trump said he had chosen Council of Economic Advisers Chairman Stephen Miran to serve as a Fed governor. The US president said that Miran, who will need to be confirmed by the Senate, would only serve the expiring term of Adriana Kugler, which expires in January.

On the economic front, US continuing jobless claims surged to the highest since November 2021, adding to recent signs that the labor market is weakening. Consumer inflation expectations rose and perceptions of the job market improved, according to a monthly Federal Reserve Bank of New York survey.

Fed Bank of Atlanta President Raphael Bostic said he still views one rate cut as likely this year, and reiterated there are reasons to be skeptical that the inflationary effects from tariffs will be temporary.

“Our base case remains that the US effective tariff rate will settle at around 15% — enough to weigh on growth and lift inflation, but not enough to derail the US economy or the equity rally,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.

While her firm expects near-term volatility to continue, it advises investors to “stick to their longer-term financial plan.”

Meantime, Trump signed an executive order easing access to private equity, real estate, cryptocurrency and other alternative assets in 401(k)s, a major victory for industries looking to tap some of the roughly $12.5 trillion held in those retirement accounts.

The US president also signed an executive order aimed at eliminating practices by banks and their regulators that result in certain customers being denied access to financial services for ideological reasons.

Elsewhere, the Bank of England cut rates to the lowest in over two years in a closer-than-expected decision that leaves investors with what Governor Andrew Bailey called “genuine uncertainty” on its next move. The pound climbed.

Corporate Highlights:

Expedia Group Inc. raised its full-year sales target after reporting strong second-quarter bookings, fueled mainly by its enterprise business as well as improved demand from US consumers. Unitedhealth Group Inc. and home health and hospice care company Amedisys Inc. have reached a proposed a settlement with the US Justice Department in a lawsuit that challenged the companies’ $3.3 billion deal. General Motors Co. plans to purchase electric-vehicle batteries from China to power its upcoming entry-level EV until it can procure US-made batteries through its partnership with South Korea’s LG Energy Solution. Airbnb Inc. slid as the short-term rental company warned that sales growth may moderate in the second half of the year. DoorDash Inc., the largest food delivery service in the US, issued an outlook for orders in the third quarter that surpassed Wall Street’s expectations, a sign that demand for its services remains resilient despite broader concerns about consumer spending. Warner Bros. Discovery Inc., the parent of HBO and CNN, swung to a profit in the second quarter, buoyed by a string of successes at the box office. Duolingo Inc. lifted its earnings forecast for the year, citing the better-than-expected performance of its subscription tiers over the second quarter. Sarepta Therapeutics Inc. reported revenue that beat estimates, which analysts attributed in part to a milestone payment for its controversial gene therapy Elevidys. Krispy Kreme Inc. posted second-quarter earnings that missed estimates and revealed more details about its turnaround plans. Crocs Inc. sank on a weaker outlook, with the maker of colorful clogs warning that cautious consumers are further pulling back on spending. Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 4 p.m. New York time The Nasdaq 100 rose 0.3% The Dow Jones Industrial Average fell 0.5% The MSCI World Index rose 0.2% Bloomberg Magnificent 7 Total Return Index rose 0.4% Philadelphia Stock Exchange Semiconductor Index rose 1.5% The Russell 2000 Index fell 0.3% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1656 The British pound rose 0.7% to $1.3444 The Japanese yen rose 0.2% to 147.09 per dollar Cryptocurrencies

Bitcoin rose 2.1% to $117,543.48 Ether rose 5.3% to $3,869.72 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.25% Germany’s 10-year yield declined two basis points to 2.63% Britain’s 10-year yield advanced two basis points to 4.55% The yield on 2-year Treasuries was little changed at 3.72% The yield on 30-year Treasuries was little changed at 4.83% Commodities

West Texas Intermediate crude fell 0.9% to $63.74 a barrel Spot gold rose 0.9% to $3,398.69 an ounce ©2025 Bloomberg L.P.