Stocks up, Treasury yields down on cooler inflation, US-China 'deal

Cooler Inflation Data – A softer-than-expected inflation reading (like CPI or PCE) could ease fears of aggressive Fed tightening, boosting stocks (especially growth sectors) and pulling Treasury yields lower as rate hike expectations diminish.

US-China 'Deal' – Reports of a potential trade or diplomatic agreement between the U.S. and China may have eased geopolitical tensions, supporting risk assets (equities) and reducing demand for safe-haven bonds, further pressuring yields.

Key Market Moves:

Equities Rally (S&P 500, Nasdaq up) – Lower inflation = better earnings outlook + cheaper borrowing. US-China progress reduces trade war risks.

Treasury Yields Drop – Bond prices rise as investors price in a less hawkish Fed and reduced uncertainty.

Dollar Weakens? – If the Fed is seen as less aggressive, the dollar could soften, aiding emerging markets.