The Impact of Dollar and Treasury Yields on Stock Market Performance

The surging US dollar and Treasury yields are weighing on stocks, causing a decline in the Nasdaq Composite and the S&P 500. The Federal Reserve's release and press conference last week accelerated the rally in rates, catching investors off guard and forcing them to price in even higher rates for longer. The higher yields and lower bond prices attract foreign investors to the US, leading to a stronger dollar and creating a cycle of higher rates. The rapid moves in bonds and currencies are disrupting global markets and impacting risk markets like stocks. The overbought signals in the dollar and yields suggest that stocks may face more turbulence before finding stability again.