Finance

U.S. Treasury yields fell for the third straight week as a sharp drop in international oil prices helped alleviate immediate concerns regarding high inflation. The yield on the benchmark 10-year Treasury note dipped to approximately 4.37%, while the 2-year note fell to around 4.09%. This stabilization occurred after reports showed cooling consumer inflation expectations and signs that oil shipments through the Strait of Hormuz were beginning to recover following recent geopolitical tensions.

Despite recent market choppiness, U.S. corporate profits reached historic highs in the first quarter of 2026, totaling $4.42 trillion on an annualized basis. After-tax profits as a percentage of GDP hit their second-highest level since 1947, providing a robust fundamental backdrop for the broader economy. Analysts expect full-year earnings growth for S&P 500 companies to remain elevated at over 20%, even as sectors like technology face valuation resets.

The U.S. economy continues to show resilience, with first-quarter GDP growth revised upward to an annualized rate of 2.1%. While the labor market has firmed recently and business activity expanded in June, policymakers remain cautious due to core inflation hitting its highest level since late 2023. Forecasts suggest a trend-like growth of roughly 2% for the remainder of 2026, though the Federal Reserve has signaled that one rate hike could still occur this year if price pressures do not sufficiently moderate.