Treasury yields climbed after data revealed an increase in consumer year-ahead inflation forecasts, with some traders profiting from the Federal Reserve's dovish bets.
The S&P 500 edged higher in a thin trading session ahead of the Thanksgiving holiday. Amazon climbed ahead of Black Friday and Cyber Monday sales. Microsoft gained on news Sam Altman will return to lead OpenAI. NVIDIA fell after its results. The dollar advanced. Oil fell.
According to the latest November reading from the University of Michigan, Americans expect inflation to rise at an annual rate of 4.5% over the next year, up from 4.4% earlier in the month, and 3.2% over the following five to ten years, according to statistics released Wednesday.
In other economic news, applications for US unemployment benefits fell last week after a string of increases, providing a brief respite in what has otherwise been a gradually cooling labour market. Durable goods orders fell more than expected in October, as commercial aircraft bookings fell and demand for business equipment weakened.
The liquidation of dovish hedges has stepped up in the SOFR options market on Wednesday, indicating that traders are taking profits on dovish Fed wagers placed as recently as September.