Stock market news

Stocks rebound as the morning rise in yields reverses – The rally in bond yields has kept investors on edge this week, as the 10-year GoC yield kept making new highs for the year. But comments from Chicago Fed President Goolsbee about the risk of overshooting on interest rates and a downward revision in second-quarter U.S. personal consumption helped push rates lower in the afternoon. The reversal of the morning strength in yields benefited tech and small-cap stocks, which led to the rally in stocks today. WTI oil prices declined after briefly exceeding $95 a barrel yesterday for the first time in more than a year*. 

^*FactSet

Perhaps the key focus area for investors from last week's Fed meeting was the update to the "dot plot," or the FOMC's best estimate of where it sees the path of interest rates going. The median dot for 2023 remained at 5.6%, which implies perhaps one more rate hike is on the table, while the rest of the dots for 2024 - 2026 all shifted higher. The Fed pulled back its estimate of rate cuts in 2024 from 100 basis points (1.0%) of cuts to just 50 basis points, although cuts in 2025 are still expected to be 120 basis points, followed by another 100 basis points in 2026, bringing the fed funds rate to under 3.0%.

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