Concerns over ballooning government debt had pushed the 30-year yield US30YT=RR to a 19-year high before the Treasury announced support measures last week.
CNBC reported on Monday that Treasury Secretary Scott Bessent could tap the department's near $1 trillion General Account to help fund bond buybacks. Yet, the 30-year U.S. Treasury yield remained above the 5% threshold.
This turbulence has sharpened focus on Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday, where investors will look for clues on policymakers' reading of the Treasury's rescue efforts.
Quarterly results from AI giant Nvidia are expected to be another key catalyst for markets. Any sign of slowing growth could reignite concerns over stretched valuations.
"Nvidia needs to impress in order to keep one leg of the stock market stable, and Warsh needs to provide clarity on interest rates in order to keep the other leg stable," said Richard Reyle, chief investment officer at Questar Capital Partners.
Markets will also monitor the Personal Consumption Expenditures report, the Fed's preferred inflation gauge, due on Wednesday. It will follow a benign consumer inflation report earlier this month that reduced the chances of an immediate increase in interest rates.
Traders expect one 25-basis-point hike by the end of 2026, according to LSEG data.
Separately, U.S. President Trump warned that tariffs on cars, trucks and automotive parts from Canada would be increased to 50% starting January 1 after trade talks collapsed over the weekend.
Automakers Ford F.N and General Motors GM.N fell, while trucking company J.B. Hunt Transport JBHT.O dropped sharply.
SPY•
