Stocks/bonds don’t like GDP inflation numbers. Stocks are down. Higher yield. The US dollar on the rise

U.S. stocks added another uptick after U.S. GDP weakened but inflation measures were higher. Core PCE prices for the quarter rose 3.7% above the 3.4% estimate. This has investors worried about weaker growth and higher prices. Not good.

In pre-market trading:

• Dow Industrial Average -436 points
• S&P index -56.3 points
• NASDAQ Index -249 points

In the US debt market, yields are also higher:

• 2-year yield 4.987%, +5.0 basis points
• 5-year yield 4.710%, +5.1 basis points
• 10-year return 4.697%, plus or 0.4 basis points
• 30-year yield 4.812%, +2.9 basis points

The US dollar also rose:

• EURUSD returns below the 1.0700 level to 1.0685. The 100-day moving average stands at 1.06779 and is the next downside target.
• GBPUSD was trading above its 100-day moving average on a 4-hour chart at 1.25149. The current price is trading at 1.2476. The broken 38.2% retracement of the April trading range lies below 1.2455. Earlier today, the price based at this level before moving higher.
• USDJPY returns higher and trades at 155.64 after hitting a low of 155.30 following the initial reaction to lower GDP. Inflation rebounds higher as it moves back towards the day’s high near 155,734. This peak represents the highest level since 1990.

Markets now expect a drop of around 35 basis points by the end of the year. This compares to 42 basis points before the data was released today.