- The selloff in treasuries continues, sending US markets lower, as traders braced for the likelihood of more aggressive policy tightening by the Federal Reserve. The dollar increased.
- The S&P 500 fell 1.5% in a dramatic reversal of a more than 1% rally in early trading Thursday on the back of upbeat earnings. The tech-heavy Nasdaq 100 index lost roughly 2%, underperforming major benchmarks, as rising yields impacted growth-oriented stocks.
- Treasury rates climbed throughout the curve, with the policy-sensitive two-year rate rising as high as 15 basis points to 2.73% as traders priced in 50 basis point rate hikes at each of the next three meetings. Following the rise in rates, the dollar rose versus all of its major peers.
- Fed's Powell said he agreed with the rationale for front-loading interest rate hikes and that a half-point raise "will be on the table" at the May meeting. He declined to comment on market pricing but highlighted that many officials supported one or more half-point hikes in the minutes of the March meeting.
- While the earnings-reporting season in the United States is still in its early stages, the indicators so far are positive. Around 80% of the 87 S&P 500 companies that have posted results, about 80% have beaten estimates.
- According to labor department data released on Thursday, unemployment claims in the United States decreased last week to a level consistent with an exceedingly tight labor market. In the week ending April 16, initial unemployment claims fell by 2,000 to 184,000, while ongoing claims for state assistance fell to 1.42 million, the lowest level since 1970.
