Bond markets drove a fresh round of volatility on US equity markets overnight, with an earlier rally unwinding as long bond yields rose to fresh multi-year peaks - Dow down -167-points or -0.67%, relinquishing an earlier ~300 point gain. The broader S&P500 -0.55%, NASDAQ -0.22%. The rally in long bond yields came after the release of the minutes of the Federal Reserve's January monetary policy meeting in which the central bank observed that a strengthening economy "increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate." Traders also noted that the minutes don't capture recent signs of rapidly rising inflation that could drive the Fed to hike rates more than the three times the central bank is forecasting this year.
On the US corporate earnings front, Advance Auto Parts rose 8.2% after the auto-parts seller topped profit expectations in the most recent quarter. With 85% of the firms in the S&P500 index having reported results, nearly 80% companies have exceeded analyst revenue expectations, the highest percentage since FactSet began tracking the metric in 2008.
