Treasury yields tick lower as investors look ahead to Fed's interest rate decision
At 4:39 a.m. ET, the 10-year Treasury yield was down just over one basis point to 4.371%. The 2-year yield was less than 1 basis point lower to 3.912%, while the 30-year yield fell one basis point to 4.911%.
One basis point is equal to 0.01%. Yields and prices move in opposite directions.
It's a busy week ahead for investors, with the Fed set to have its two-day policy meeting, concluding on Wednesday, when the interest rate decision will be announced.
Traders are pricing in a 97% chance that interest rates will be held steady at their current target range of 4.25% to 4.5%, according to the CME FedWatch Tool. They will also look for clues on whether rate cuts will be coming later in the year.
The personal consumption expenditures index — the Fed's preferred inflation gauge — is due on Thursday and will reveal the effects of tariffs on inflation. The report is forecast to show inflation increasing to 2.4% from 2.3% year over year, according to FactSet, and to 0.31% from 0.14%, on a monthly basis.
Other economic data coming out this week includes the Job Openings and Labor Turnover Survey on Tuesday, ADP's private payrolls report on Wednesday, weekly initial jobless claims on Thursday, and July's jobs report on Friday.
On the tariff front, the U.S. and European Union announced Sunday that they've reached a trade agreement which includes 15% tariffs on EU goods imported to the U.S. That's down from the 30% levy that the EU would have been hit with on the approaching Aug. 1 deadline.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Boston Globe
an hour ago
- Boston Globe
Trump pressures China and India to stop buying cheap Russian oil
Three countries are big buyers of Russian oil China, India and Turkey are the biggest recipients of oil that used to go to the European Union. The EU's decision to boycott most Russian seaborne oil from January 2023 led to a massive shift in crude flows from Europe to Asia. Since then China has been the No. 1 overall purchaser of Russian energy since the EU boycott, with some $219.5 billion worth of Russian oil, gas and coal, followed by India with $133.4 billion and Turkey with $90.3 billion. Before the invasion, India imported relatively little Russian oil. Hungary imports some Russian oil through a pipeline. Hungary is an EU member, but President Viktor Orban has been critical of sanctions against Russia. Advertisement The lure of cheaper oil One big reason: It's cheap. Since Russian oil trades at a lower price than international benchmark Brent, refineries can fatten their profit margins when they turn crude into usable products such as diesel fuel. Russia's oil earnings are substantial despite sanctions The Kyiv School of Economics says Russia took in $12.6 billion from oil sales in June. Russia continues to earn substantial sums even as the Group of Seven leading industrialized nations has tried to limit Russia's take by imposing an oil price cap. The cap is to be enforced by requiring shipping and insurance companies to refuse to handle oil shipments above the cap. Russia has to a great extent been able to evade the cap by shipping oil on a 'shadow fleet' of old vessels using insurers and trading companies located in countries that are not enforcing sanctions. Advertisement Russian oil exporters are predicted to take in $153 billion this year, according to the Kyiv institute. Fossil fuels are the single largest source of budget revenue. The imports support Russia's ruble currency and help Russia to buy goods from other countries, including weapons and parts for them.
San Francisco Chronicle
an hour ago
- San Francisco Chronicle
Trump pressures China and India to stop buying cheap Russian oil
U.S. President Donald Trump is pushing China and India to stop buying oil from Russia and helping fund the Kremlin's war against Ukraine. Trump is raising the issue as he seeks to press Russian President Vladimir Putin to agree to a ceasefire. But cheap Russian oil benefits refiners in those countries as well as meeting their needs for energy, and they're not showing any inclination to halt the practice. Three countries are big buyers of Russian oil China, India and Turkey are the biggest recipients of oil that used to go to the European Union. The EU's decision to boycott most Russian seaborne oil from January 2023 led to a massive shift in crude flows from Europe to Asia. Since then China has been the No. 1 overall purchaser of Russian energy since the EU boycott, with some $219.5 billion worth of Russian oil, gas and coal, followed by India with $133.4 billion and Turkey with $90.3 billion. Before the invasion, India imported relatively little Russian oil. Hungary imports some Russian oil through a pipeline. Hungary is an EU member, but President Viktor Orban has been critical of sanctions against Russia. The lure of cheaper oil One big reason: It's cheap. Since Russian oil trades at a lower price than international benchmark Brent, refineries can fatten their profit margins when they turn crude into usable products such as diesel fuel. Russia's oil earnings are substantial despite sanctions The Kyiv School of Economics says Russia took in $12.6 billion from oil sales in June. Russia continues to earn substantial sums even as the Group of Seven leading industrialized nations has tried to limit Russia's take by imposing an oil price cap. The cap is to be enforced by requiring shipping and insurance companies to refuse to handle oil shipments above the cap. Russia has to a great extent been able to evade the cap by shipping oil on a 'shadow fleet' of old vessels using insurers and trading companies located in countries that are not enforcing sanctions. Russian oil exporters are predicted to take in $153 billion this year, according to the Kyiv institute. Fossil fuels are the single largest source of budget revenue. The imports support Russia's ruble currency and help Russia to buy goods from other countries, including weapons and parts for them.
Yahoo
3 hours ago
- Yahoo
Stocks Rally on Fed Rate Cut Speculation
The S&P 500 Index ($SPX) (SPY) Monday closed up +1.47%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +1.34%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.87%. September E-mini S&P futures (ESU25) rose +1.58%, and September E-mini Nasdaq futures (NQU25) rose +1.96%. Stock indexes rallied sharply on Monday as they recovered from some of last Friday's steep losses. Recent stellar earnings results boosted Magnificent Seven technology stocks and semiconductor chip makers, supporting gains in the broader market. Stocks also have support from speculation that last Friday's dismal payroll and ISM manufacturing reports will prompt the Fed to cut interest rates. The chances of a Fed rate cut at the September FOMC meeting rose to 90% from 40% before the reports were released. More News from Barchart Find Winning Momentum Trades With This Moving Average Stock Screener Tariffs, Earnings and Other Can't Miss Items this Week Dear Nvidia Stock Fans, Mark Your Calendars for August 27 Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Monday's US economic news was mixed for stocks. US June factory orders fell -4.8% m/m, right on expectations and the biggest decline in more than 5 years. However, June factory orders ex-transportation rose +0.4% m/m, stronger than the expectations of +0.3% m/m and the largest increase in 7 months. In the latest tariff news, President Trump said Monday that he would be "substantially raising" the tariff on US imports from India from the current 25% due to India's purchases of Russian oil. Last Thursday, President Trump raised tariffs on some Canadian goods to 35% from 25% and announced a 10% global minimum, along with tariffs of 15% or higher for countries with trade surpluses with the US, effective after midnight on August 7. According to Bloomberg Economics, the average US tariff will rise to 15.2% if rates are implemented as announced, up from 13.3% earlier, and significantly higher than the 2.3% in 2024 before the tariffs were announced. The markets this week will focus on earnings reports and any fresh tariff or trade news. On Tuesday, the June trade deficit is expected to narrow to -$61.1 billion from -$71.5 billion in May. Also on Tuesday, the July ISM services index is expected to climb by +0.7 to 51.5. On Thursday, weekly initial unemployment claims are expected to increase by +3,000 to 221,000. Also on Thursday, Q2 nonfarm productivity is expected to be +2.0% with unit labor costs rising +1.5%. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 90% at the September 16-17 FOMC meeting and 70% at the following meeting on October 28-29. Q2 earnings reports released thus far suggest that S&P 500 earnings are on track to rise +9.1% for the second quarter, much better than the pre-season expectations of +2.8% y/y and the most in four years, according to Bloomberg Intelligence. With over 66% of S&P 500 firms having reported Q2 earnings, around 82% exceeded profit estimates. Overseas stock markets on Monday settled mixed. The Euro Stoxx 50 closed up sharply by +1.49%. China's Shanghai Composite rebounded from a 2-week low and closed up +0.66%. Japan's Nikkei Stock 225 fell to a 1.5-week low and closed down -1.25%. Interest Rates September 10-year T-notes (ZNU25) Monday closed up +5.5 ticks. The 10-year T-note yield fell -2.4 bp to 4.192%. Sep T-notes on Monday recovered from overnight losses and rallied to a 3-month nearest-futures high, and the 10-year T-note yield fell to a 1-month low of 4.192%. T-notes have positive carryover support from last Friday's weaker-than-expected payroll and ISM manufacturing reports, which boosted the chance of a Fed rate cut at next month's FOMC meeting to 90% from 40% before the reports. Also, Monday's -1% drop in WTI crude oil prices reduced inflation expectations, a bullish factor for T-notes. In addition, Monday's strength in European government bonds provided carryover support to T-notes. Gains in T-notes were limited by a sharp rebound in equity markets, which curbed safe-haven demand for government securities. Also, supply pressures are weighing on T-notes as the Treasury will auction $125 billion of T-notes and T-bonds in this week's August quarterly refunding, beginning with Tuesday's $58 billion auction of 3-year T-notes. European government bond yields on Monday moved lower. The 10-year German bund yield fell to a 1.5-week low of 2.624% and finished down -5.4 bp to 2.624%. The 10-year UK gilt yield dropped to a 1-month low of 4.501% and finished down -1.9 bp to 4.509%. The Eurozone Aug Sentix investor confidence index unexpectedly fell -8.2 to -3.7, weaker than expectations of an increase to 6.9. Swaps are discounting the chances at 15% for a -25 bp rate cut by the ECB at the September 11 policy meeting. US Stock Movers Strength in the Magnificent Seven technology stocks supported gains in the broader market. Nvidia (NVDA), Alphabet (GOOGL), and Meta Platforms (META) closed up more than +3%. Also, Microsoft (MSFT) and Tesla (TSLA) closed up more than +2%. In addition, Apple (AAPL) closed up +0.48%. Chip stocks rallied on Monday, a supportive factor for the overall market. Broadcom (AVGO) and KLA Corp (KLAC) closed up more than +3%. Also, Advanced Micro Devices (AMD), Micron Technology (MU), Marvell Technology (MRVL), and Lam Research (LRCX) closed up more than +2%. In addition, ARM Holdings Plc (ARM), Applied Materials (AMAT), and ASML Holding NV (ASML) closed up more than +1%. Steelcase (SCS) closed up more than +60% after being acquired by HNI for $2.2 billion or about $18.30 per share. Idexx Labs (IDXX) closed up more than +27% to lead gainers in the S&P 500 and Nasdaq 100 after reporting Q2 revenue of $1.11 billion, better than the consensus of $1.07 billion, and raising its full-year EPS forecast to $12.40-$12.76 from a previous forecast of $11.93-$12.43, stronger than the consensus of $12.21. Wayfair (W) closed up more than +11% after reporting Q2 adjusted EPS of 87 cents, well above the consensus of 33 cents. Spotify (SPOT) closed up more than +5% after it said it will increase the monthly cost of premium subscriptions in Markets across South Asia, the Middle East, Africa, Europe, and Latin America. Martin Marietta Materials (MLM) closed up more than +3% after raising its full-year adjusted Ebitda forecast to $2.30 billion from a previous forecast of $2.15 billion-$2.45 billion, stronger than the consensus of $2.27 billion. Tyson Foods (TSN) closed up more than +2% after reporting Q3 sales of $13.88 billion, above the consensus of $13.55 billion. ON Semiconductor (ON) closed down more than -16% to lead losers in the S&P 500 and Nasdaq 100 after forecasting Q3 adjusted gross margin of 36.5% to 38.5%, the midpoint weaker than the consensus of 37.7%. Bruker Corp (BRKR) closed down more than -8% after reporting Q2 revenue of $797.4 million, below the consensus of $810.2 million. LyondellBasell Industries NV (LYB) closed down more than -4% after reporting Q2 adjusted Ebitda of $715 million, weaker than the consensus of $743.9 million. Berkshire Hathaway (BRK.B) closed down more than -3% after reporting Q2 operating earnings fell -3.8% y/y to $11.16 billion. Waters (WAT) closed down more than -1% after forecasting Q3 adjusted EPS of $3.15-$3.25, the midpoint below the consensus of $3.23. Earnings Reports (8/5/2025) Advanced Micro Devices Inc (AMD), Aflac Inc (AFL), Amgen Inc (AMGN), Apollo Global Management Inc (APO), Archer-Daniels-Midland Co (ADM), Arista Networks Inc (ANET), Assurant Inc (AIZ), Ball Corp (BALL), Broadridge Financial Solutions (BR), Caterpillar Inc (CAT), Cummins Inc (CMI), DaVita Inc (DVA), Devon Energy Corp (DVN), Duke Energy Corp (DUK), DuPont de Nemours Inc (DD), Eaton Corp PLC (ETN), Expeditors International of Washington (EXPD), Fidelity National Information (FIS), Fox Corp (FOXA), Gartner Inc (IT), Henry Schein Inc (HSIC), International Flavors & Fragrances (IFF), Jacobs Solutions Inc (J), Leidos Holdings Inc (LDOS), Marathon Petroleum Corp (MPC), Marriott International Inc/MD (MAR), Match Group Inc (MTCH), Molson Coors Beverage Co (TAP), Mosaic Co/The (MOS), News Corp (NWSA), Pfizer Inc (PFE), Public Service Enterprise Group (PEG), Skyworks Solutions Inc (SWKS), Super Micro Computer Inc (SMCI), TransDigm Group Inc (TDG), Yum! Brands Inc (YUM), Zebra Technologies Corp (ZBRA), Zoetis Inc (ZTS). On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
