U.S. Treasury yields drop as investors await economic data

Stocks closed Monday’s session modestly lower after attempting a comeback earlier in the day following Friday’s slump amid concerns about inflation and a bubble in artificial intelligence shares

U.S. Treasury yields dropped on Monday as investors were shy about taking big bets as they waited for the week’s busy schedule of U.S. economic data releases including the jobs report and retail sales as well as the latest inflation reading.

Stocks closed Monday’s session modestly lower after attempting a comeback earlier in the day following Friday’s slump amid concerns about inflation and a bubble in artificial intelligence shares.

After digesting last week’s update from the U.S. central bank, investors were turning their attention to this week’s economic data, which was delayed by the 43-day U.S. government shutdown, including the jobs report for November and retail sales data as well as the consumer price index (CPI) inflation report.

With traders already pricing in more rate cuts in 2026 compared with Fed estimates for just one, R. Burns McKinney, portfolio manager at NFJ Investment Group, said investors are hoping for a jobs report that is weak enough to support more easing.

This is the kind of market where investors are kind of hoping for softness. We’re right back to where bad news is good news. You just don’t want the bad news to be terribly bad. You want mildly bad news, said McKinney.

New York Fed President John Williams said on Monday the U.S. central bank’s interest rate cut last week leaves it in a good position to deal with what lies ahead, adding that he sees inflation moderating amid cooling in the job market.

Boston Fed President Susan Collins said she supported last week’s rate cut due to a changing inflation outlook but that she would want greater clarity about the inflation picture before adjusting policy further.