US Market Wrap

05 Aug 2022 20:15US Bonds US Indexes USD

- US stocks rose for the week after a surprisingly strong jobs report allayed recession fears while clearing the way for the Federal Reserve to raise interest rates sharply at its next meeting.

- The S&P 500 declined on Friday, falling as much as 1.1% during the session. However, the index and the Nasdaq 100 finished their third week of gains, the longest winning streak since April.

- Treasury yields fell, with the 10-year yield hovering around 2.83%, after climbing nearly 26 basis points since Monday.

- The strong jobs report released on Friday validated the Fed's view of a resilient economy capable of withstanding further interest-rate hikes. Traders have rebalanced their expectations for the Fed, with a three-quarters-point hike at the September meeting the more likely scenario as the central bank battles inflation.

- This week, a number of Fed officials reaffirmed the central bank's determination to bring high prices down. Among them is Fed President James Bullard, who has stated his preference for front-loading large interest-rate hikes. After Friday's job report, that stance is likely to have strengthened, ruling out the possibility of a dovish pivot, as Fed Chair Jerome Powell hinted last week.