Some market gurus are starting to worry that the summer rally on Wall Street may be starting to fizzle, after stocks lurched from oversold to overbought.
Defensive sectors back in vogue Cyclical sectors outperformed as stocks rallied in July and early August. But that trend appeared to come to an end this week, as defensive sectors retook the lead. Bond yields are rising Rising bond yields are another sign that the rally in stocks could be about to turn, Goldman said.
Bond yields rise as prices fall, and Goldman and others on Wall Street are now waiting to see if stocks will follow bond prices lower.So is the dollar Rising Treasury yields and softening inflation have helped drive the U.S. dollar higher, creating another potential headwind for stocks. The ICE U.S. Dollar Index DXY, +0.07%, a gauge of the dollar’s strength against a basket of rivals, topped 108 on Friday, rising to its strongest level in a month.