Stocks and Bonds Await Federal Reserve Meeting and Employment Data

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The course for stocks and bonds for the rest of the year may be determined by the Federal Reserve meeting, U.S. employment data, and earnings from Apple Inc. October has been volatile, with stocks down 3.5% for the month. The bond market, influenced by the Fed's interest rate stance and rising fiscal concerns, will play a significant role in determining market performance. Investors are concerned that higher Treasury yields could further impact stocks. Strong employment data and a hawkish message from the Fed could lead to a rise in yields.

, with a Federal Reserve meeting, U.S. employment data and earnings from technology heavyweight Apple Inc possibly setting the course for stocks and bonds the rest of the year.

Investors worry that yields could rise further if the Fed reinforces its hawkish message at the central bank’s Nov. 1 monetary policy meeting. Strong U.S. employment data on Friday could also be a catalyst for yields to rise if it bolsters the case for keeping rates elevated to cool the economy and prevent inflation from rebounding.

Investors are playing a “waiting game of how much does each economic data point need to increase to put another rate hike back on the table,” said Alex McGrath, chief investment officer for NorthEnd Private Wealth. Adding to the bond market’s concerns, the Treasury is expected to announce its upcoming auction sizes later this week. Worries about a growing federal deficit and increased supply have helped push yields higher.

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