Economist cover: The union’s troubled state

Markets are returning from the extended weekend on the wrong foot, with hotter-than-expected economic data and weak corporate guidance from Home Depot and Walmart battering asset prices.

Fed policy has a heightened data dependency, leading to increased volatility in the bond market. Even though rate cuts remain the odds-on favorite for later this year, investors should heed the tenor of recent Fed-speak, which reinforced the notion of rates being higher for longer.

Markets are suffering sharp losses following an eventful three-day weekend that featured heightening geopolitical tensions amidst a violent selloff in Japanese debt that sent yields on the longest tenors to all-time highs.

Volatile trading on Wall Street has risk assets and fixed income swinging from gains to losses indecisively as investors await clarity on AI and the status of employment prior to making bold wagers.