Unstoppable Wall Street: it rises again and scores its eighth consecutive advance

This Tuesday, Wall Street It continues to rise and thus marks its eighth consecutive day of increases. The S&P 500 rises 0.4% and is experiencing relative calm, after months of heavy losses. It should be remembered that last week it experienced a rebound, which was the best of the year.

On the other hand, the Dow Jones Industrial Average climbs 0.3%while the compound Nasdaq registers an increase of 1%.

Among the companies that stand out on the day, TripAdvisor rises 4.6% after presenting results for the summer that exceeded analysts’ expectations. HoweverEmerson Electric experienced a significant drop of 8.5% due to not meeting projections.

Throughout the earnings season, most large companies have beaten estimatesbut one key factor has had an even bigger impact on the sharp market fluctuations since the summer: the bond market.

Wall Street: fixed income vs. variable income

Treasury bond yields appear uneven this Tuesdaywith the 10-year yield falling from 4.6% on Monday to 4.0%. In early summer, the rapid increase in yields of Treasury shook the stock market as it moved closer to the Federal Reserve’s main interest ratewhich was above 5.5% and at its highest level since 2001. This increase was aimed at controlling inflationbut high rates and yields can have detrimental effects on stock prices, the economy and the financial system as a whole.

However, yields fell sharply last week after investors interpreted the Federal Reserve’s comments as a sign that interest rate hikes may be over. Inflation has been moderating since its peak in the summer of 2022, and the recent jump in Treasury yields could be acting as a substitute for further rate increases.

Fed Chair Jerome Powell warned last week that further hikes could still come if the rise in Treasury yields does not remain “persistent.” Another Fed official, Neel Kashkari, He expressed concern about declaring victory too soon and stressed the importance of looking at more data indicating a slowdown in inflation.

Speeches from other Fed officials this weekcould influence financial markets, as there are relatively few high-impact economic reports on the calendar. Depending on what Fed officials say, the week could go more smoothly in financial markets, which have seen wild swings in response to changes in market narratives.