Despite Waller's Efforts, Treasury Losses Shrink As Fed Hopes Soar

A post‑holiday session on Wall Street opened with Treasuries trimming earlier losses after Federal Reserve Governor Christopher Waller signaled that borrowing costs could be lowered as soon as July. Equities fluctuated as traders braced for roughly $6.5 trillion in expiring options, keeping a close watch on fresh headlines from the Middle East.
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The S&P 500 swung between modest gains and declines, with the quarterly “triple‑witching” event—simultaneous expiration of stock options, index options, and futures—magnifying potential volatility. Short‑maturity debt outperformed, leaving the two‑year Treasury yield near 3.94 percent.
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Oil prices eased after a report suggested Tehran was willing to discuss curbs on uranium enrichment. Fears that the United States might be drawn swiftly into the regional conflict cooled when President Donald Trump delayed a decision on military strikes against Iran.
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Meanwhile, Waller repeated his view that tariff‑driven inflation should prove transitory, echoing remarks delivered after the Federal Open Market Committee left rates unchanged for the fourth straight meeting.
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Policymakers on Wednesday projected two cuts before year‑end 2025. “We’re juggling a lot—geopolitical flare‑ups, tariff uncertainties, and guessing the Fed’s next step,” said Brian Buetel of UBS Wealth Management, adding that equities remain a forward‑looking gauge of economic prospects that he expects to stay resilient this year.
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Tesla plans to inaugurate its first retail outlets in India in July, according to people familiar with the discussions, marking the electric‑car maker’s formal entry into the world’s third‑largest auto market as it seeks growth to offset softer demand in Europe and China.
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Elon Musk’s artificial‑intelligence venture xAI sweetened terms on a $5 billion convertible‑debt sale as lead bank Morgan Stanley gathered final commitments.
Meta Platforms is pushing its surprise hit smart glasses upmarket through a partnership with eyewear brand Oakley, introducing sport‑oriented models with enhanced video capabilities aimed at athletes.
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Kroger exceeded analyst expectations for quarterly revenue, suggesting that consumers continue to spend on groceries despite economic headwinds.
Darden Restaurants is exploring “strategic alternatives” for its Bahama Breeze brand, Chief Executive Officer Rick Cardenas said.
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Home Depot has bid for building‑products distributor GMS, potentially pitting the home‑improvement giant against QXO, which this week floated a $5 billion offer, the Wall Street Journal reported.
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Used‑car retailer CarMax topped consensus estimates for same‑store sales and earnings per share. Accenture’s third‑quarter report flagged weaker‑than‑anticipated bookings even as other headline numbers met projections.
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SoftBank founder Masayoshi Son is said to be courting Taiwan Semiconductor Manufacturing to help build a trillion‑dollar robotics and A.I. hub in Arizona that would be among his most ambitious ventures yet.
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Chinese bargain marketplace Temu has seen its U.S. sales slide further as it slashes advertising outlays, a pullback that follows President Trump’s new wave of tariffs.
At 10:31 a.m. in New York, the S&P 500 was little changed, as was the tech‑heavy Nasdaq 100, while the Dow Jones Industrial Average added about 0.3 percent.
Europe’s Stoxx 600 climbed 0.3 percent, and the broader MSCI World Index was flat.
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The Bloomberg Dollar Spot Index hardly budged. The euro hovered near $1.1505, the pound near $1.3470, and the yen weakened 0.3 percent to 145.86 per dollar.
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In digital assets, Bitcoin rose 0.9 percent to roughly $105,243, and Ether gained 0.4 percent to about $2,518.
Benchmark 10‑year Treasury yields added three basis points to 4.42 percent; German and U.K. 10‑year yields were steady near 2.52 percent and 4.54 percent, respectively.
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West Texas Intermediate crude slipped 0.2 percent to $74.98 a barrel, while spot gold was little changed. Triple‑witching often boosts volume and sudden price swings as funds rebalance and dealers shed hedges, which can obscure the market’s underlying direction until the following week.
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More broadly, investors see the story hinging on whether the Fed can subdue inflation without derailing growth. Interest‑rate swaps still imply two quarter‑point cuts within 18 months, though the precise schedule will depend on upcoming inflation and labor data. Outside the U.S., copper eased after a strong run, and wheat futures gained on renewed Black Sea supply worries.
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Diplomats suggested that any Iranian nuclear concessions could lessen the odds of a wider conflict and temper oil prices, yet headline risk remains high. Ahead, traders will parse next week’s personal‑consumption expenditures inflation gauge and housing indicators for fresh policy clues, while strategists advise balancing quality equities with short‑term bonds to navigate potential volatility.

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