Highlights
Equities were flat to better Monday in quiet trading with relative strength in megacaps helping the Nasdaq outperform. The Dow industrials fell 0.4 percent, the S&P 500 was flat, and the Nasdaq gained 0.5 percent. US Treasury yields, the dollar, and oil prices all rose.
Sentiment was undercut by uncertainty over the US debt ceiling as the June 1 X-date approaches. High-level talks were scheduled to resume later Tuesday.
Bond yields were pressured higher by hawkish-leaning comments from Federal Reserve officials. Minneapolis Fed President Neel Kashkari said he was open to a June pause but it would not mean the Fed was done raising rates. St. Louis Fed President James Bullard, a noted hawk, said he favored two rate increases this year, and that his view was based on an expectation that inflation and growth would slow quickly.
On the positive side, regional banks recovered ground. Rising commodities prices helped commodity-linked stocks have a good day, especially oil services and metals.
Among sectors, best were technology, communications services, health care, and real estate, while consumer staples lagged. FANMAGs got a lift from strength in Microsoft and from Meta, which rebounded on relief that it can move on now that the EU has imposed a huge fine on the social media giant for violating privacy rules.
Sentiment was undercut by uncertainty over the US debt ceiling as the June 1 X-date approaches. High-level talks were scheduled to resume later Tuesday.
Bond yields were pressured higher by hawkish-leaning comments from Federal Reserve officials. Minneapolis Fed President Neel Kashkari said he was open to a June pause but it would not mean the Fed was done raising rates. St. Louis Fed President James Bullard, a noted hawk, said he favored two rate increases this year, and that his view was based on an expectation that inflation and growth would slow quickly.
On the positive side, regional banks recovered ground. Rising commodities prices helped commodity-linked stocks have a good day, especially oil services and metals.
Among sectors, best were technology, communications services, health care, and real estate, while consumer staples lagged. FANMAGs got a lift from strength in Microsoft and from Meta, which rebounded on relief that it can move on now that the EU has imposed a huge fine on the social media giant for violating privacy rules.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
