Yields decline as energy-driven inflation concerns ease. Treasury yields edged lower today as the rally in oil prices slowed, providing some relief from recent worries about the potential inflationary impact. The 2-year yield closed 3 bps lower at 4.37%, while the 10-year yield closed 2 bps lower at 4.78%. WTI crude futures settled around $91 per barrel, after closing at $90.22 yesterday. Meanwhile, equities climbed on the improved inflation sentiment, with the S&P 500 and NASDAQ closing 0.46% and 0.45% higher, respectively.
ADP jobs report lands slightly softer than expected. ADP employment data showed 38k private sector jobs added in August, the weakest reading since January and below expectations of 47k. However, July’s figure was upwardly revised from 44k to 46k. Healthcare and education drove gains with 45k jobs added in August, followed by leisure and hospitality, while professional and business services and manufacturing posted declines. Markets will turn to Friday’s nonfarm payrolls report for further clarity, as forecasts expect 55k jobs added in August. A stable reading would likely give the Fed breathing room to keep its focus on inflation at this month’s FOMC meeting.
Trump says US is prepared to continue MidEast strikes. President Donald Trump said the US is prepared to carry out additional strikes on Iran “anytime we want,” adding that the US “took out all of the new equipment that they tried to build along the Strait of Hormuz” and maintains control of the waterway. Tehran said recent US strikes targeted civilians, with Foreign Ministry Spokesman Esmail Baghaei vowing to “respond to these savage crimes with firmness,” as Iran launched drone and missile attacks on US military bases in Jordan, Kuwait, and the UAE. Oil prices climbed as tensions re-escalated, even as Trump said the renewed fighting would be short-lived.