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Stocks got a lift from easing Treasury yields after the head of the Federal Reserve made comments that investors took as a signal for possible cuts to interest rates later this year. Fed Chair Jerome Powell, whose utterances are always finely parsed for hints about rates, gave a nod to improvements in inflation data after some disappointingly high readings early in the year.

“We just want to understand that the levels that we’re seeing are a true reading of underlying inflation,” he said.

The hope on Wall Street is that inflation will slow enough to convince the Fed to lower its main interest rate, which has been sitting at its highest level in more than two decades and pressing the brakes on the economy. Treasury yields have largely been easing since April on hopes for such cuts.

A report on Tuesday may have hindered those hopes, though. It showed US employers were advertising more job openings at the end of May than economists expected and slightly more than April’s tally. While plentiful job openings are great news for workers, the fear on Wall Street is that too strong of a job market will put upward pressure on inflation and force delays to rate cuts.

After swinging lower following Powell’s comments, Treasury yields pared their losses following the report on job openings. The yield on the 10-year Treasury was sitting at 4.42 per cent, compared with 4.46 per cent late Monday.

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The week’s most anticipated economic data will arrive on Friday, when the US government reports how many jobs employers added in total during June. Before then, the US stock market will have a shortened trading day on Wednesday and a holiday on Thursday for the Fourth of July.

In commodities markets, the price of benchmark US oil ended up slipping modestly after touching its highest price since April earlier in the morning.

With AP

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