Treasuries rose after a rough first half, as weak economic data fueled recession fears. Low volume ahead of Monday's US holiday exacerbated a late-day rebound in stocks.
Bond yields fell, with the five-year rate falling by more than a quarter of a percentage point at one point. Traders are paying the most since March to protect themselves from a further decline in 10-year US yields. The S&P 500 rose across the board, while the tech-heavy Nasdaq 100 underperformed.
According to Goldman Sachs strategists, the risk of a renewed selloff in equities is still high because investors are pricing in a mild recession. They added that corporate earnings will likely suffer as margins are put to the test by inflation and deteriorating consumer sentiment. A key indicator of US manufacturing fell to a two-year low.
Stocks and bonds have recently experienced outflows as investors fear the economy will contract in the face of sky-high inflation and hawkish central banks. According to EPFR global data, approximately $5.8 billion was exited from global equity funds in the week ending June 29, according to Bank of America. Bond redemptions totaled $17 billion.
Due to difficult market conditions, crypto broker Voyager digital has temporarily suspended trading, deposits, and withdrawals, amid a deepening meltdown in beleaguered cryptocurrency markets.
Oil prices rose elsewhere as export disruptions in Libya exacerbated global supply concerns. Copper fell to a 17-month low as fears of an economic slowdown fueled a sell-off in industrial commodities. Wheat futures dropped to levels not seen since before the Russia-Ukraine war.
