The prospect of interest rate increases loomed over the stock market today, as investors assessed key economic data released this week. The Treasury yield climbed steadily throughout the day, prompting concern among some traders.
According to CNBC, the yield on the benchmark 10-year Treasury note rose to 1.62%, up from 1.45% just a week ago. This followed the release of data on Wednesday showing that inflation rose more than expected in May, fueling speculation that the Federal Reserve may raise interest rates sooner than anticipated.
Investors are closely watching for any signals from the Fed about its plans for monetary policy. In recent months, Fed officials have consistently said they expect to keep interest rates near zero until at least 2023, but some analysts are now questioning whether economic growth and rising inflation may force a change to this timeline.
Despite the prospect of higher interest rates, some tech stocks continued to climb today, buoyed by optimism about the economy’s broader recovery from the pandemic. Apple, Amazon, and Microsoft all ended the day higher, but other sectors, including financials and energy, posted losses.
Overall, the stock market ended the day mixed, with the S&P 500 closing slightly higher and the Nasdaq Composite index down slightly. Traders are likely to remain cautious in the coming weeks, as they watch for further economic data and signals from the Fed.