Developments in Global Stock Exchanges and Bond Market
Despite lower-than-expected inflation data, US stock markets failed to maintain their gains, and the selling pressure in the global bond market deepened.
While US stock markets were unable to sustain their intraday gains, selling pressure in the bond market and losses in global bonds stood out as key elements of the period.
Inflation Data and Market Reaction
In August, the core personal consumption expenditures price index came in below expectations, recording a 0.2 percent monthly increase, while the previous month's figure was revised downward. This strengthened expectations that inflationary pressure might ease, and in money markets, the probability of the Fed raising interest rates in October dropped below 40 percent.
Stock Market Movements and Consumer Spending
The initial optimism in the markets could not be carried over to the end of the day, with the S&P 500 recording its worst monthly performance since June. Consumer spending in August showed its fastest increase in over a year, revealing that the economy remained robust.
Selling Pressure in the Bond Market
While short-term yields showed limited change, the 30-year US Treasury yield hovered near its highest level since 2002. The US 10-year Treasury yield remained around 5.28 percent, while the 30-year yield stood at 5.62 percent.
Global Bond Indices and Losses
Global government bonds closed September with a 2.4 percent loss, while Bloomberg’s global government bond index marked its worst quarterly performance since the end of 2024. The decline in oil prices partially limited the pace of bond sales.
Technology Stocks and Asian Markets
Micron Technology’s strong forecasts provided support for tech stocks, while Google’s unveiling of its new Gemini 4 Argon artificial intelligence model pushed Alphabet shares higher. Influenced by these developments, the Nikkei 225 and Kospi indices in Asia gained value.