1. Treasury yields declined as investors assessed Fed's interest rate outlook. 2. Fed President Williams hinted at possible rate cuts in December. 3. Market expectations shifted to a 70% chance of December rate cut. 4. U.S. job growth exceeded expectations, but unemployment rose to 4.4%. 5. Investor sentiment remains cautious amid AI market valuation concerns.
Lower yields and potential rate cuts are typically supportive for equities. Historical examples include the 2019 rate cuts leading to market rallies.
Interest rates and Treasury yields are critical for stock valuations; higher likelihood of rate cuts boosts S&P 500 appeal. The direct correlation between lower rates and stock market performance is well-established.
The expected rate cuts have immediate effects on investor sentiment and market liquidity. The short-term impact is seen in December amid the Fed's decisions.