- Stocks rose slightly in the final hour of trading, as traders awaited Jerome Powell's remarks to see if he would dampen Wall Street's dovish narrative. Bond prices increased during a busy week for debt sales.
- While the pace of the equity rally slowed, the S&P 500 posted its eighth straight positive day. Despite mixed metrics, US 10-year yields fell to around 4.5% after a $40 billion auction, with a slightly higher-than-anticipated rate of 4.519%: a sign that demand fell short of expectations. Thirty-year rates fell to their lowest level in over a month. Brent crude fell below $80 per barrel.
- Treasury sales are increasingly influencing stock prices. According to Citigroup Inc. data, the S&P 500 has moved about 1% in either direction on auction days since the beginning of 2022, far exceeding the prior decade's average. Their research puts traders on high alert ahead of Thursday's $24 billion sale of 30-year bonds.
- Wall Street is also paying close attention to Fedspeak. Powell did not comment on the outlook for interest rates in a brief statement on Wednesday. He'll have more time to express himself on Thursday during a panel discussion on monetary policy challenges.
- The current level of the Fed's benchmark rate - 5.25% to 5.5% - is expected to be the peak of the tightening cycle, according to swap traders.
