Treasury Yields Edge Lower as Fedspeak in Focus: Markets Wrap

(Bloomberg) — Wall Street traders gearing up for Jerome Powell’s speech later this week will soon be able to parse the views of the two policymakers who have recently expressed concerns that hesitance to lower interest rates could risk unnecessary damage to the labor market.

Treasury yields edged lower ahead of remarks from Fed Governor Michelle Bowman, who is scheduled to speak twice on Tuesday. Her colleague Christopher Waller is on slate to talk on Wednesday, when the minutes from the central bank’s latest gathering come out.

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Action was muted in stocks, as the retail earnings season got underway. Home Depot Inc. climbed after reiterating its outlook for the year despite unveiling a weak sales metric.

Powell’s speech on Friday at the central bank’s annual gathering in Jackson Hole, Wyoming, kicks off a make-or-break stretch for the Treasury market, which sees a quarter-point rate cut next month as virtually a lock, with at least one more by year-end. He’s used the occasion to make market-moving policy pronouncements in recent years, and this time the setting is potentially momentous.

“As the market readies for Powell’s speech at Jackson Hole, we’ll argue that the biggest risk for Treasuries is if the Fed Chief chooses to throw cold water on the widely anticipated September rate cut,” said Ian Lyngen at BMO Capital Markets. “To be clear, this is not our base case scenario, although it’s worth acknowledging that the front-end of the curve is vulnerable to a bearish correction if Powell doesn’t deliver on the degree of dovishness that the market is currently anticipating.”

Meantime, S&P Global Ratings said revenues from tariffs will help soften the blow to the US’s fiscal health from tax cuts, enabling it to maintain its current credit grade. S&P affirmed its AA+ rating for the US — a score it’s given since 2011.

The decision offers a glimmer of good news for President Donald Trump by endorsing one of his arguments that imposing tariffs is already helping to improve the nation’s fiscal position. Tariff revenue reached a fresh monthly record in July, with customs duties climbing to $28 billion.

On the geopolitical front, Trump urged Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelenskiy to show some “flexibility” as the US president accelerates his efforts to end the war in Ukraine and encourages the two leaders to hold a bilateral summit.

“I hope President Putin is going to be good, and if he’s not, it’s going to be a rough situation,” Trump said Tuesday in an interview on Fox News. “I hope that Zelenskiy, President Zelenskiy, will do what he has to do. He has to show some flexibility also.”

Corporate Highlights:

A key Home Depot Inc. sales metric disappointed in the latest quarter, a sign that consumers are staying away from big purchases as interest rates remain high. Home Depot sources more than 50% of its items in the US and said it plans to keep prices competitive. It also reiterated its guidance for the full year. Palo Alto Networks Inc. gave a stronger-than-expected annual forecast, as the company seeks to provide customers with a bundle of AI-enabled cybersecurity products to fend off attacks. SoftBank Group Corp. agreed to buy $2 billion of Intel Corp. stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. Apple Inc. is expanding iPhone production in India at five factories, including a pair of recently opened plants, as it seeks to lessen its reliance on China for US-bound models. Tesla Inc. priced its new six-seat Model Y sport utility vehicle in the same range as local rival Li Auto Inc.’s extended-range L8 model to win over middle-class families in China’s hyper-competitive market. Viking Therapeutics Inc.’s experimental obesity pill disappointed in a mid-stage study, marking another weaker-than-expected result for an oral alternative to popular weight-loss injections. Anglo American Plc suffered a major setback to its restructuring plans after Peabody Energy Corp. decided to walk away from a $3.8 billion deal to buy its steelmaking coal business following a fire at an Australian mine. Black Hills Corp. agreed to acquire another US power and natural gas utility, NorthWestern Energy Group Inc., for about $3.6 billion. Nexstar Media Group Inc. has agreed to buy TV station operator Tegna Inc. for $3.5 billion in a cash deal that stands to dramatically expand Nexstar’s reach to 80% of US households and test the Trump administration’s appetite for consolidation. Medtronic Plc will expand its board after Elliott Investment Management became one of its biggest investors. The medical devices maker also reported profit that beat estimates and lifted full-year earnings guidance. Air Canada reached a deal with flight attendants to end a three-day walkout that led to mass cancellations during the busy summer season and forced country’s largest airline to withdraw its financial outlook for this year. BHP Group’s full-year underlying profit fell by more than a quarter to its lowest level since the pandemic, broadly in line with market expectations, as prices of its key earners — iron ore and coking coal — came under pressure from softer Chinese demand. Shein Group Ltd. has considered moving its base back to China in the hopes that it would help sway Beijing authorities to sign off on the fast-fashion retailer’s plans to go public in Hong Kong, according to people familiar with the matter. Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 9:31 a.m. New York time The Nasdaq 100 fell 0.2% The Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 rose 0.6% The MSCI World Index was little changed Bloomberg Magnificent 7 Total Return Index fell 0.2% The Russell 2000 Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro rose 0.1% to $1.1674 The British pound was little changed at $1.3500 The Japanese yen was little changed at 147.85 per dollar Cryptocurrencies

Bitcoin fell 0.6% to $115,763.42 Ether fell 0.2% to $4,327.23 Bonds

The yield on 10-year Treasuries declined two basis points to 4.32% Germany’s 10-year yield was little changed at 2.76% Britain’s 10-year yield declined one basis point to 4.73% The yield on 2-year Treasuries declined one basis point to 3.75% The yield on 30-year Treasuries declined two basis points to 4.92% Commodities

West Texas Intermediate crude fell 1.2% to $62.67 a barrel Spot gold was little changed ©2025 Bloomberg L.P.