Wall St advances, Treasury yields climb as robust data boosts soft landing bets
Business
Wall St advances, Treasury yields climb as robust data boosts soft landing bets
NEW YORK (Reuters) - U.S. stocks gained ground on Thursday and benchmark Treasury yields moved higher after robust U.S. labor market data weakened bets that the Federal Reserve would begin lowering its key policy rate as early as March.
The S&P 500 and the Nasdaq were higher, tech- and tech-adjacent momentum stocks providing much of the upside muscle, while more defensive sectors kept the Dow essentially flat.
A report from the Labor Department showed initial claims for unemployment benefits slid to their lowest level since Sept. 2022, casting further doubt as to whether the U.S. central bank will cut its Fed funds target rate at the conclusion of its March policy meeting.
That, in addition to fears of escalation of conflicts in the Middle East, helped keep upward pressure on Treasury yields.
"Over the last few days, the economic data has been showing signs of resilience," said Greg Bassuk, chief executive officer at AXS Investments in New York. "And the irony is that while the stronger-than-anticipated economy is good for corporations and investors, it's throwing cold water on expectations that we've got a rate cut coming in March."
"So you've got both bullish and bearish investors coming off the sidelines, really focused on the economic data, knowing that that's really going to drive Fed policy in 2024," Bassuk added.
Financial markets are pricing in a 55.7% likelihood that the Fed will cut rates at its March meeting, down from 70.2% a week ago, according to CME's FedWatch tool.
