Stocks struggled to find direction amid bets that even if the Federal Reserve stops raising interest rates in September, policy will remain tight to avoid a spike in inflation. Treasuries fell following a poor 30-year bond auction.
As Fed Bank of San Francisco President Mary Daly told Yahoo! Finance, the central bank still has more work to do, Walt Street's risk-on bid faded. She added that officials have yet to decide whether to raise rates and for how long. This is despite the fact that the core consumer price index experienced the smallest back-to-back increase in more than two years.
The S&P 500 finished little changed after a 1% gain earlier in the day. Nvidia which has more than tripled this year, has extended a three-day losing streak. General Motors and Ford fell on growing concern that union leaders' demands would drive up labour costs at the automakers. Walt Disney rallied after reporting that capital spending and outlays for films and television shows are lower than expected.
Treasury 30-year yields rose after the highest rate since 2011 was awarded in a $23 billion auction. Two-year yields, which are more sensitive to upcoming Fed moves, remained relatively unchanged. Losses were erased by the dollar. Oil's rally, fueled by signs of a tightening market, stalled near the year's highs as technical barriers stymied further gains.
