- Stocks fell as Treasury yields rose on speculation that the Federal Reserve will raise interest rates aggressively to combat decades-high inflation. The expiration of options on Thursday could have amplified equity market movements.
- Twitter closed lower as Elon Musk expressed doubt about whether his offer to buy the social-media giant will be accepted, citing a "plan B" if the bid is not accepted.
- The threat of higher borrowing costs sank rate-sensitive technology firms, which led to S&P 500 losses. Ten-year US Treasury yields topped 2.8%, and the dollar rose after New York Fed President Williams said that speeding up the pace of tightening to include half-percentage-point hikes is a "reasonable option."
- The rise in treasury yields marked a reversal from the previous two days, when traders reduced expectations of Fed tightening following evidence that inflation was set to moderate. That support faded in pre-holiday trading as data showed import prices rose more than economists expected.
- The United States central bankers face a delicate balancing act in tightening to combat inflation without suffocating the economy's recovery.
- Consumer sentiment in the United States unexpectedly rose to a three-month high in early April, owing to optimism about job growth and wage expectations. Separate data showed that retail sales increased in March, aided by an increase in gas station receipts that obscured mixed results in other major spending categories. Initial jobless claims increased slightly last week but remained historically low.
- Traders at Wall Street's largest investment banks had a better-than-expected quarter as the Ukraine conflict exacerbated volatility already fueled by inflation fears and a lingering pandemic. However, as recession fears grow, concerns about future earnings growth emerge. Goldman Sachs and Morgan Stanley reported unexpected increases in trading revenue, while Citigroup and JPMorgan Chase also outperformed expectations in the first quarter.
- According to people familiar with the matter, European Central Bank policymakers are coming to an agreement on raising interest rates in the third quarter to combat record inflation. The first increase in borrowing costs in more than a decade is expected to be 25 basis points, according to the people, who asked not to be identified because the discussions are private. A spokesperson for the ECB declined to comment.
