The sell-off in Treasuries continued on Tuesday, pushing yields collectively higher, with two-year and five-year yields rising more than 10 basis points in a day.

The yield on 10-year US Treasuries broke through 2.90 per cent in intraday trading, approaching 3 per cent, reversing its highest level since December 2018 for three consecutive trading days, closing at 2.94 per cent, up about 9 basis points on the day. The yield on 30-year Treasuries rose above 3 per cent for the first time since 2019.

While US stocks, which have fallen for days, rebounded strongly, with the S & P and Nasdaq rising 1.6 per cent and 2.2 per cent respectively from their trough of more than a month. All sectors except energy rose, several sectors rose more than 1 per cent, and the non-essential consumer goods sector led the rise. Amazon.Com Inc's sector, which leads blue-chip technology stocks, rose nearly 3 per cent.

Bond market expectations of the Fed's sharp monetary tightening have risen further

Us Treasuries sold off because comments by Fed officials had increased expectations that the Fed would act aggressively to curb inflation.

Charles Evans, chairman of the Chicago Fed, said on Tuesday that the Fed is likely to raise interest rates to between 2.25% and 2.5% by the end of the year and may need to raise rates further if inflation persists. St. Louis Fed Chairman James Bullard also said Tuesday that interest rates could rise sharply by 0.75 percent sometime this year.

The data of Tradeweb, an electronic trading platform operator, showsThe real yield on the 10-year Treasury note entered a positive range on Tuesday for the first time since March 2020.

The surge in real yields reflects the extent to which the Fed can tighten financial conditions, so nominal interest rates are rising sharply as real interest rates soar.

Strong economic data undercut talk of an impending recession

On Tuesday, IMF cut its global economic growth forecast for this year to 3.6%, 0.8 percentage points lower than its January forecast, but u.s. stocks rose strongly, recording their biggest one-day gain in more than a month.

The factors that investors are worried about have not really changed-inflation, the crisis in Russia and Ukraine, the epidemic, and Tuesday's widespread rise in real and nominal Treasury yields, putting pressure on US stocks, especially in riskier areas.

But some psychological factors of investors play a role.

Us stocks were fuelled by a series of unexpectedly strong economic data that undermined talk of an impending recession.

New housing starts surged in March to their highest level since 2006, indicating a strong performance in the property sector, which is highly sensitive to changes in interest rates.

Other recent reports have also brought comfort to bulls.Initial jobless claims in the US have fallen in recent weeks, suggesting hiring remains strong, with a consumer confidence survey released by the University of Michigan in early April rising to a three-month high.

Meanwhile,High-frequency data show that consumers are once again going out shopping and dining in droves.

High-frequency indicators became popular during the outbreak as analysts tried to understand the movement of consumers during the blockade, and now they are on the rise.

According to Bloomberg, the barometer of returning to work has risen to its highest level since March 2020, while TSA passenger throughput data and indicators that measure bookings through the restaurant booking app OpenTable have also improved.

Tuesday,Companies that benefit from economic reopening outperform those that do well when people are trapped at home.E-commerce platform Etsy Inc. Shares soared 4.4%, with bookmakers Penn National Gaming Inc. And Wynn Resorts (Wynn Resorts Ltd.) And used car dealer CarMax Inc. Share prices have all risen by more than 5%.

Mark Haefele, global wealth management at UBS, said that while growth risks had increased, his basic prediction was that a recession would be avoided.

First-quarter earnings will look positive, he said, adding that investors should look for the long-term value of stocks. The chief investment officer wrote: "Periods of market volatility and increased uncertainty tend to provide an attractive long-term entry point for structural growth. " He thinks 5G, automation, robotics and smart travel are attractive.

JPMorgan Chase & Co's Marko Kolanovic says runaway commodity prices, out-of-sync global central bank policies and recent stock market declines have created unique buying opportunities for growth and value stocks. The strategist said sentiment and positions were still too pessimistic.

However, analysts point out that it is not appropriate to read too much into one-day trends, and concerns about economic growth still haunt investors and economists.

Lauren Goodwin, an economist and portfolio strategist at New York Life Investment, told Bloomberg:

When the growth path, especially future growth and interest rate paths, is so uncertain, the day-to-day work of the Fed and investors becomes more data-dependent than usual. So, if the positive data drives up the stock price, thenWhen the data are disappointing, we may go in the opposite direction.”