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The supportive inflation readings boosted stocks. A broader market is favorable, but the risk is that any possibility of further Fed rate hikes has been removed. ....
While the S&P 500 rose, trouble lurks below the surface. The broader lift to stocks outside the Magnificent 7 faded last week as yields increased. Notably, much of the market remains hostage to interest rate expectations. ....
While a U.S. government shutdown is looming on October 1, it is not likely the cause of the weakness in the S&P 500. Instead, our woes stem from the sharp rise in the after-inflation expectations yields since they provide a more potent competitor to stocks. ....