Uncertainty Behind Strong Data: Impact of Rising US Bond Yields

In the current economic environment, the stock market's performance has shown complex and variable characteristics. On one hand, strong employment data and consumer indices indicate that the U.S. economy remains robust; on the other hand, the Federal Reserve has become more cautious about the future direction of monetary policy, which has filled investors with uncertainty about future interest rate levels.

Market Reactions Under Strong Economic Data

Despite the U.S. adding more than expected non-farm jobs in June, reaching 209,000, the labor force participation rate remains at a low level. Data shows that the consumer confidence index has also rebounded, indicating an increased optimism about future income and expenditure. However, against this backdrop, investors are concerned about the Federal Reserve's future interest rate hike policy.

Divergent Corporate Earnings Performance

A series of corporate earnings reports recently released have shown a polarization in the market. Apple Inc.'s quarterly profit exceeded expectations, causing its stock price to surge after the report was released; meanwhile, Amazon's profit fell short of expectations due to increased costs, leading to a drop in stock price. This polarization reflects the market's clear divergence in judgment on the prospects of different industries and companies.

Reasons and Impacts of Rising U.S. Treasury Yields

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In recent weeks, the yield on the 10-year U.S. Treasury note has continued to rise to 2.87%, hitting a new high for the year, reflecting changes in investors' expectations of future interest rate levels. Although strong economic data has led the market to anticipate a slowdown in the Federal Reserve's rate cuts, at the same time, higher bond yields have increased corporate borrowing costs and may suppress economic growth.

Warm-up in the Energy Market and Future Outlook

International oil prices have recently rebounded, with Brent crude oil futures prices rising to $72.09 per barrel. This phenomenon reflects that despite geopolitical uncertainties, investors still have confidence in the global economic recovery. However, it also serves as a reminder to market participants to be vigilant about potential risk factors.In summary, under the current complex and volatile market environment, expectations of interest rate hikes by the Federal Reserve and corporate earnings reports have become the key factors guiding the direction of the stock market. While strong economic data has brought some confidence, it has also increased uncertainty about the future direction of monetary policy. Therefore, investors should closely monitor subsequent data releases and policy developments, and maintain a prudent attitude in their investment decisions.