Stocks turned bullish and the Dow pushed above the 25,000 mark once again early in the week as both U.S. and Chinese officials made positive comments about easing tensions regarding the potential trade war. However, lackluster economic data along with the Fed’s warning about rate hikes kept the market trading sideways later in the week.
The Federal Open Market Committee (FOMC) meeting minutes revealed that the Fed will likely allow the inflation rate above the target of 2% to accommodate a soft landing of the economy. However, as the Fed reminded the market about the upcoming interest rate hike in June, it balanced out the optimism with enough reality to keep the market wondering if it’s worth turning bullish at this point in time.
We also had some interesting corporate earnings reports this week. Target Corporation (TGT ) missed its EPS forecast as the tight margins kept the bottom line in check.
To sum up, it was a happening week. However, broader macroeconomic forces like increasing Treasury yields and anticipation of another rate hike next month kept the market range bound.
Be sure to check out our previous week’s edition here, in which the market worried that a 10-Year Treasury yield above 3% might prompt short-term investors to sell stocks and invest in bonds.