- US futures fell as bond yields increased due to inflationary concerns and uncertainties over the direction of US monetary policy, dampening any benefits from China's decision to relax COVID restrictions.
- S&P 500 contract losses were 0.4%, while NASDAQ 100 losses were 0.3%. The increase in Treasury yields propelled the dollar into positive territory. This month saw the greatest increase in the most policy-sensitive two-year rate.
- Last week's stronger-than-anticipated US jobs report and subsequent increase in average hourly earnings indicate new inflation risks and increased bond volatility. While dovish Fed language may be keeping yields anchored, they still have a ways to go before they catch up to expectations for the terminal rate.
- On the verge of posting its largest fourth-quarter gain since 1999, the S&P 500 is rising on expectations that the US inflation rate has peaked and bond yields have stabilized.
