Stocks Fall, Bonds Rise After Economic Reports

Stocks fell and bonds rose after data signaled some softening in the labor market, housing and a gauge of business outlook. Traders also continued to wade through corporate earnings while waiting to hear from a raft of Federal Reserve speakers.


Most major groups in the S&P 500 dropped. The policy-sensitive two-year yield declined as much as nine basis points to 4.16%. The dollar retreated against most of its developed-market peers. Oil slipped as further signs of a US slowdown overshadowed a substantial draw in crude stockpiles.

Recurring unemployment benefit claims jumped to the highest level since November 2021, adding to signs that the labor market is beginning to lose momentum. Sales of previously owned US homes fell in March by more than forecast, underscoring a housing market that’s still on shaky footing despite some signs of stabilizing.


Fed Bank of New York President John Williams said late Wednesday that while the banking sector has stabilized, the recent stress may make it more challenging for households and businesses to access credit.


“If the Fed stays the course, broad financial conditions should continue to tighten, the economy should decelerate into recession, and stocks should trade down sharply,” wrote Chris Senyek of Wolfe Research. “On the flip side, the biggest upside risk to our bearish call remains the Fed backing off way too soon! Although, if the Fed fails to sustainably bring down inflation, the ultimate pain will likely be much worse 12-24 months down the road.”