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.

Money markets fully priced in a Fed hike by December as data showed the economy remains on solid footing. While a key inflation gauge matched expectations, it’s still well above the central bank’s target. Short-dated Treasuries underperformed. The S&P 500 fluctuated, with traders bracing for Nvidia Corp.’s results. Oil fell on hopes for a revival of the Strait of Hormuz.

With investors 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, policymakers 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.

Strong consumption, spending and durable goods orders suggest the Fed has room to tighten without causing a recession, according to David Russell at TradeStation.

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

An inflection point may be approaching, but for now consumers continue to benefit from income growth that is outpacing inflation, according to Jeff Roach at LPL Financial.

“For policymakers, the balance of risks still tilts toward inflation,” he said. “If geopolitical tensions ease in the near term, core inflation could fall below 3%, giving investors a reason for optimism.”

Aside from the economic picture, Wall Street is awaiting Nvidia’s earnings, not so much for what the numbers will say about the chip giant, but for what they mean to artificial intelligence and the market itself. Analysts project that revenue nearly doubled from a year ago, which would be the fastest pace in two years, 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. 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. 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. Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 11 a.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 rose 0.1% The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1645 The British pound fell 0.4% to $1.3589 The Japanese yen fell 0.1% to 159.40 per dollar Cryptocurrencies

Bitcoin fell 0.5% to $77,843.29 Ether rose 0.2% to $2,440.4 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.65% Germany’s 10-year yield advanced two basis points to 3.22% Britain’s 10-year yield advanced two basis points to 5.01% The yield on 2-year Treasuries advanced four basis points to 4.21% The yield on 30-year Treasuries advanced two basis points to 5.18% Commodities

West Texas Intermediate crude fell 0.7% to $81.82 a barrel Spot gold fell 1.1% to $4,607.70 an ounce ©2026 Bloomberg L.P.