Bond Market Signals Rate Hike as Stocks Drift Lower

The US bond market is signaling that interest rates may be about to rise as investors bet on an increase by the Federal Reserve to combat high inflation.

Despite this, US stocks only experienced a modest decline. The S&P 500 fell 0.2%, while the Dow Jones Industrial Average dipped just 9 points or less than 0.1%, and the Nasdaq composite slipped 0.5%.

The shift in the bond market was attributed to investors building bets that the Federal Reserve may hike interest rates soon to get the nation's high inflation under control.