Shares of banks and other financial institutions ticked up as stock and bond markets continued to stabilize.
The yield on the 10-year Treasury note slipped below 2.8%, far below recent peaks above 3.5%, as inflation fears abate.
"While inflation appears to be peaking...it's not likely to come off at a pace fast enough to spur the type of sustained Fed pause the equity market is already discounting," warned strategists at brokerage Morgan Stanley, in a note to clients.
"The Fed is talking tough on inflation, indicating its fight is far from over and multiple rate hikes are yet forthcoming," said Jim Paulsen, chief investment strategist at money manager The Leuthold Group, in a note to clients.
"The bond market, though, has turned decidedly dovish," pricing in fewer rates than the Fed's schedule would suggest, Mr. Paulsen added. During past divergences of this kind, Mr. Paulsen said the central bank typically comes around to the Treasury market outlook.
Chinese real-estate firms remained under pressure after new home prices posted their steepest year-over-year decline in more than six years in July, the latest impact from a speculative bust in the sector.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
08-15-22 1708ET
