(Bloomberg) — Stocks fell as traders trimmed bets on Federal Reserve rate cuts, sending Treasury 10-year yields above 4%. Brent crude jumped to $80 a barrel, with mounting tensions in the Middle East raising speculation that Israel may attack Iran’s oil infrastructure.
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In the wake of surprisingly strong job growth for September, expectations for a continued slowdown in inflation reinforced speculation that policymakers will opt for a smaller rate reduction next month. Money markets no longer see another half-point cut this year, while a quarter-point reduction in November that was once seen as certain is now priced at about an 80% probability.
“Friday’s strong jobs report not only appeared to kill any chance of a 50-basis-point rate cut in November, it kickstarted chatter about the Fed leaving rates unchanged if economic data continues to come in hotter than expected,” said Chris Larkin at E*Trade from…
