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Wall Street stocks were mixed, while U.S. government debt and the U.S. dollar in a report showed that the U.S. inflation Stayed high last month.

The blue-chip S&P 500 index rose 0.2% in the afternoon in New York, and rose 1% from the March 2020 low when the rapid pandemic lockdown plunged global financial markets into chaos. The technology-focused Nasdaq Composite Index fell 0.2%, making it more vulnerable to strong inflation pushing up interest rates.

However, the U.S. Treasury bond market has been inspired by the fact that inflationary pressure is still high, but its rapid rise is slowing down. A previous report showed that the year-on-year growth rate of consumer prices stabilized at 5.4% last month, matching the 13-year growth in June. new highs. Wall Street economists had expected an increase of 5.3%.

The 10-year U.S. Treasury bond yield fell by 0.03 percentage points to 1.32%, and the U.S. dollar fell 0.3% against a basket of six global currencies. Oil prices recovered from earlier declines and rose 1.2% on the day to US$71.45.

“As inflationary pressures slow down, the market is interpreting this news,” said Lale Akoner, a strategist at Bank of New York Mellon Investment Management.

The interpretation of US price growth comes as investors are racing to bet on how soon the Fed will begin to control its crisis-time stimulus program. A major concern is whether inflation will prompt central bank officials to reduce bond purchases sooner than the market expected.

Federal Reserve Chairman Jay Powell insisted that most of the inflation so far is a temporary consequence of the rapid reopening of the economy after the blockade last year. However, other policy committee members made more tough comments this week, leading to a fall in U.S. Treasuries. Morgan Stanley analysts on Tuesday advanced their forecasts for the U.S. central bank to start downsizing to December this year.

“The Fed will try to understand whether the transition theme is happening, [and] With this data, we actually saw it,” Akoner said.

The Stoxx 600 index in Europe closed up 0.4%, another record high, as strong earnings in the already sensational corporate reporting season boosted market sentiment. The FTSE 100 Index rose 0.8%.

Elsewhere, the U.S. Senate passed a bipartisan vote $1 trillion infrastructure package The $3.5 trillion budget for Tuesday and Wednesday will now be submitted to the House of Representatives when lawmakers return after a summer recess later this month.

Credit Suisse analysts wrote: “The expansionary fiscal policy of the Biden administration should support economic growth and be beneficial to the stock market, but the excessively long technical indicators and the possibility of the Federal Reserve reducing bond purchases pose short-term risks to the market.”

The United States auctioned $41 billion in new 10-year notes on Wednesday in response to strong demand, and primary dealers—they have an obligation to absorb any supply not purchased by direct and indirect bidders—have the smallest share since 2008.

Ben Jeffery, US interest rate strategist at BMO Capital Markets, said: “After we saw a sell-off in the past week, the high rewards for non-dealers indicate that investor demand for the 10s is very strong.”

Additional report by Kate Duguid in New York