Powell's Pushback and Bond Market's Impact on Stocks

Federal Reserve Chair Jerome Powell's more hawkish stance on interest rates, refusing to rule out another rate hike and expressing uncertainty about the current policy stance's ability to combat inflation, led to a slightly exaggerated market reaction and halted the S&P500's eight-day winning streak. The Treasury market also experienced a jolt, with yields jumping after a poor long bond auction. The auction's weak demand, possibly influenced by a ransomware attack on a Chinese bank's U.S. arm, raised concerns about wider system liquidity. The S&P500 closed almost 1% lower, impacting global markets. Attention now turns to next week's release of the U.S. consumer price inflation report. The dollar held its gains, while sterling slipped and China's stocks fell. U.S. Treasury Secretary Janet Yellen began meetings with Chinese Vice Premier He Lifeng to limit economic fallout from tensions between the two countries.