Closing Recap

U.S. stocks finished little changed after a volatile “chop day,” with an afternoon rally fading into the close, as markets digested rising Treasury yields and awaited details on a major tax bill; Bitcoin hit new all-time highs, while gold and oil prices slipped. 

Key Takeaways 

• Flat Finish After Volatility: Major indices ended near unchanged after whipsawing throughout the day. An afternoon “melt-up” was largely erased in the final minutes. 
• Yields Drive Early Weakness, Stocks Follow Bond Rally: Stocks initially fell as Treasury yields spiked (10-yr to 4.63%), then rallied as yields pulled back, highlighting sensitivity to interest rates. 
• Tax Bill in Focus: House passage of a sweeping Republican tax and spending bill, which would significantly add to the national debt, influenced market sentiment and yield movements. 
• Bitcoin Hits New All-Time High: Bitcoin surged above $112,000, continuing its impressive run. 
• Dip Buying Persists: Investors continue to show a willingness to buy market dips, contributing to the afternoon recovery before the late fade. 
• Gold Eases, Oil Slips: Gold prices pulled back slightly, while crude oil declined on discussions of further OPEC+ production increases. Dollar Rebounds: The U.S. dollar index gained, recovering from recent weakness. 
• Economic Data Mixed: Jobless claims improved, but Chicago Fed activity and Existing Home Sales softened. Flash PMIs were surprisingly strong. 

Market Overview

U.S. equity markets experienced a day of choppy, two-sided trading, ultimately finishing near the flatline after a significant afternoon rally largely unraveled in the final minutes. The session began with a risk-off tone as Treasury yields spiked higher, with the 10-year yield touching 4.63% and the 30-year briefly exceeding 5.15%. This early weakness in bonds, and consequently stocks, was attributed to ongoing concerns about the U.S. debt load following last week’s Moody’s credit downgrade and the House’s passage of a major Republican tax and spending bill that is projected to add trillions to the national debt.

Index	Up/Down	% Change	Last
DJ Industrials	-1.35	-0.0001	41859
S&P 500	-2.61	-0.0004	5842
Nasdaq	53.09	0.0028	18925
Russell 2000	-0.99	-0.0005	2045

However, as the day progressed, Treasury yields began to retreat from their highs, and stocks dutifully followed bonds higher, staging a strong afternoon rally. This “melt-up” saw the CBOE Volatility Index (VIX) edge back below the 20 level, indicating a renewed comfort among investors to buy market dips, a pattern observed frequently since the sharp April sell-off. Trade and tariff headlines were relatively quiet, allowing markets to focus more on domestic policy developments and economic data. News that the U.S. government is phasing out the penny also provided an interesting, though likely non-market-moving, footnote to the day. Despite the late fade in stocks, the underlying bid during the session suggested that investor appetite for equities remains, particularly when bond yields show signs of easing.

Economic Data

Economic data yesterday was mixed, with improving jobless claims and strong flash PMIs contrasting with a weak Chicago Fed index and slightly disappointing existing home sales. 

• Weekly Jobless Claims: Fell to 227,000 from 229,000, better than the 230,000 consensus. Continuing claims rose to 1.903 million. 
• Chicago Fed National Activity Index (Apr): Sank to -0.25, the worst reading since October and a significant sequential drop. 
• S&P Global Flash PMIs (May): Showed surprising strength. Composite PMI rose to 52.1 (from 50.6). Services PMI jumped to 52.3 (from 50.8), and Manufacturing PMI increased to 52.3 (from 50.2). 
• Existing Home Sales (Apr): Edged down -0.5% m/m to a 4.00 million unit annualized rate, slightly below the 4.10M consensus. Inventory rose to 4.4 months’ supply. 

Commodities, Currencies, and Treasuries 

Gold prices slipped, with June futures falling $18.50 (-0.55%) to settle at $3,295.00 per ounce, pulling back from recent highs as the U.S. dollar rebounded. Crude oil prices also declined, with WTI down $0.37 (-0.60%) to $61.20/bbl. The weakness came after reports that OPEC+ members are discussing another significant production increase at their upcoming June 1st meeting, potentially adding to supply concerns. Weekly natural gas inventory data showed a larger-than-expected build. Bitcoin surged to new all-time highs above $112,000 before paring some gains. Treasury yields were highly volatile; after spiking early (10-year to 4.63%, 30-year to 5.15% – highest since Oct 2023), they reversed sharply lower, with the 10-year yield ending down about 5 basis points near 4.547%. The U.S. dollar index rebounded +0.45%, gaining against the Euro and Yen.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.37	USD/bbl	61.2
Brent	-0.47	USD/bbl	64.44
Gold	-18.5	USD/oz	3295
EUR/USD	-0.007	USD	1.1259
USD/JPY	0.56	JPY	144.23
10-Year Note	-0.05	%	0.04547

Looking Ahead 

The market will continue to digest the implications of the House-passed tax bill as it moves to the Senate, particularly its impact on the national debt and Treasury yields. With trade headlines relatively quiet, focus remains on domestic economic data and corporate earnings. The strong rebound in flash PMIs today will be weighed against other signs of economic softening. Any further comments from Fed officials regarding the outlook for inflation and growth will also be closely watched. The resilience of the “buy the dip” mentality will be tested if bond yields resume their upward trajectory.