Tech Earnings Push US Markets Near Record Highs Amid Steepening Yield Curves

The US markets are seeing a surge in tech earnings, pushing indices to near-record highs.

The Nasdaq and S&P 500 are within striking distance of their all-time peaks, while stocks and bonds have welcomed recent inflation figures that reduce the likelihood of a Federal Reserve interest rate hike next month.

A key consequence of these developments is steeper yield curves, with the 2s/10s curve steepening by around 20 basis points. This 'bull steepening' is driven mainly by short-end buying and long-end selling.

The US budget deficit has also reached a record $432 billion in July, more than 50% wider than last year's figure. The gross national debt is poised to hit $40 trillion as the government continues to spend heavily.