The key indices of the US stock market – Dow Jones, NASDAQ, and S&P 500 – ended Tuesday with new growth. We still believe that this is a paradoxical behavior of investors since nothing has changed fundamentally enough to rush to buy American stocks. Nevertheless, the market is growing so far, and we can only watch this movement and be surprised. Unfortunately, not everything always happens logically in the markets. A vivid confirmation of this is the last meeting of the Fed. It was decided to raise the rate by 0.75% for the second time in a row, but for some reason, the markets interpreted such a decision of the regulator as "dovish." As a result, the dollar began to fall (though not much, but still), and the US stock market began to grow. It all ended with the fact that a whole group of members of the Fed monetary committee had to convince the markets of their commitment to a "hawkish" and aggressive attitude in monetary policy. In other words, the Federal Reserve confirmed that it would continue raising the key rate, and there is no talk of reducing the rate of its increase yet. Of course, the Fed will not be able to raise the rate by three–quarters of a point at every meeting now, but even three increases in a row are already very strong. The report on American inflation came out, and for some reason, the markets again thought that the Fed had already changed its mindset to "dovish." However, the consumer price index slowed down for the first time in a long time and did not guarantee that it would continue to slow down in the coming months. The dollar fell again, and stock indices and stocks rose. And even in the last few days, indices and stocks continue to grow when the US currency has moved into growth.
Now many experts from many banks and analytical companies are talking about the illogical growth of the stock market. Many of them predict a new collapse for him. Meanwhile, the yield on 10-year Treasury bonds in the United States has fallen from 3.4% to 2.8% over the past month. Recall that the yield of 10-year treasuries is very important in understanding the flow of capital between markets. The higher the treasuries yield, the more investments are poured into the bond market. And the losses are borne by the stock market and the cryptocurrency market. The treasuries yield has been falling for about a month, and stock indices and stocks have been growing for more than a month. At least, this explains at least a little logically why the US stock market is growing now. In this case, a new increase in the key rate should lead to a new increase in the treasuries yield, since the yield of bonds cannot be lower than the cost of loans.