Lower U.S. inflation pressures support stocks, bond yields decline, dollar weakens

From Yahoo Finance.: 2025-05-15 17:08:00

Stocks were supported by softer bond yields as U.S. inflation pressures eased, but momentum may be waning on Wall Street. The Dow rose 0.65%, while the VIX volatility index hit a low. Walmart shares fell 5% before ending 0.5% lower. Oil dropped 2.5% on U.S.-Iran nuclear deal expectations. The yen gained against the dollar, and gold rebounded from a one-month low.

A decline in bond yields cushioned global equity markets, with U.S. yields pulling back sharply. Rising real yields present a challenge despite declining inflation. The Fed’s pause on rate cuts has led to higher real borrowing costs, tightening monetary policy. Concerns over U.S. public finances and foreign investor sentiment have impacted Treasury yields, with the term premium near its highest level in over a decade. The direction of real rates is a key factor influencing economic activity and investor behavior.



Read more at Yahoo Finance.: Trading Day: Inflation – calm before the storm?