US Equities Rise Despite Global Bond Sell-Off
US equities experienced a modest increase last week despite a sharp sell-off in global government bonds. The US 10-year Treasury yield rose above 5.2%, with the 30-year yield reaching its highest level since 2004, due to stronger business activity, elevated energy prices, and hawkish Federal Reserve commentary.
The rise in bond yields was driven by expectations of further rate hikes, as well as higher inflation concerns. In contrast, US new home sales rose 6.4% in August, exceeding expectations.
On a separate note, Presidents Trump and Xi agreed to extend the existing US-China trade truce by two months, avoiding an immediate escalation in tariffs. However, the summit failed to deliver substantial breakthroughs on key issues such as tariffs, rare-earth supplies, and technology restrictions.