Fed Maintains Steady Stance as Treasury Yields Rise and Stocks Fluctuate

Key Developments:

* Treasury yields rose, and stocks fluctuated as Federal Reserve Chair Jerome Powell reiterated the Fed's cautious approach to rate cuts.
* Bonds fell across the curve, while equities wavered due to weakness in tech stocks.
* Intel Corp. and GlobalFoundries Inc. surged after US Vice President JD Vance emphasized domestic production of sophisticated AI hardware.

Fed Stance:

* Powell indicated that the Fed is in no hurry to adjust its policy stance, given the economy's strength and less restrictive monetary policy.
* He downplayed the labor market as a source of significant inflationary pressures and declined to speculate on tariff policy.

Market Reaction:

* The S&P 500 remained largely unchanged, while the Nasdaq 100 declined slightly.
* The Dow Jones Industrial Average rose moderately.
* The yield on 10-year Treasuries advanced to 4.53%.
* The Bloomberg Dollar Index weakened marginally.

Economic Data Watch:

* Bureau of Labor Statistics figures on Wednesday are expected to show a 0.3% increase in the core consumer price index excluding food and energy.
* A survey by 22V Research suggests that 41% of respondents expect a "risk-off" reaction to the CPI data.

Corporate Highlights:

* Boeing Co. delivered more jets than Airbus SE in a month for the first time in two years.
* Coca-Cola Co. exceeded profit expectations, benefiting from increased beverage prices.
* Shopify Inc. reported strong quarterly revenue, indicating the success of its e-commerce software.
* DuPont de Nemours Inc.'s earnings surged, driven by the electronics market and cost-cutting measures.
* Marriott International Inc.'s guidance for net rooms growth in 2025 fell below analyst expectations.

Key Economic Events This Week:

* US CPI (Wednesday)
* Fed Chair Powell testifies before the House Financial Services Committee (Wednesday)
* Eurozone industrial production (Thursday)
* US initial jobless claims, PPI (Thursday)
* Eurozone GDP (Friday)
* US retail sales, industrial production, business inventories (Friday)

Market Summary:

* Stocks: S&P 500 (unchanged), Nasdaq 100 (-0.1%), Dow Jones Industrial Average (+0.1%)
* Currencies: Bloomberg Dollar Spot Index (-0.2%), Euro (+0.4% to $1.0348), British Pound (+0.5% to $1.2428)
* Bonds: Yield on 10-year Treasuries (+3 basis points to 4.53%)
* Commodities: West Texas Intermediate crude (+1.5% to $73.37 a barrel), Spot gold (-0.1% to $2,905.06 an ounce)