The US stock market has fallen again, what happened? Keep a close eye on these two pieces of data today and tomorrow

The market's expectations for interest rate cuts continue to cool, leading to a rise in overnight U.S. bond yields, with the three major U.S. stock indexes collectively closing lower, and the Dow falling to a four-week low.

The 10-year U.S. Treasury yield rose above 4.60% for the first time in nearly four weeks, and the two-year Treasury yield approached 5.0%, hitting a four-week high. Analysts believe that the unexpected sharp rise in consumer confidence in May and large-scale U.S. bond sales are the reasons for the rise in bond yields. Hawkish comments from Federal Reserve officials have raised concerns in the market about future interest rate developments, putting pressure on both the stock and bond markets.

Minneapolis Fed President Kashkari stated on Tuesday:

I don't think anyone is completely ruling out the possibility of a rate hike. I think the probability of a rate hike is very low, but I don't want to rule out any possibilities.

The upcoming release of two key data points will continue to impact market expectations for interest rate cuts and the trend of U.S. stocks and bonds, namely the U.S. initial jobless claims for the week on Thursday, and the Federal Reserve's "favorite" inflation gauge - the core PCE index on Friday.

Economists currently expect the U.S. core PCE to rise by 0.2% in April, potentially marking the smallest increase in the index so far this year.

Earlier this month, investors were "pleased" when data showed significant slowing job growth and a slight cooling of inflation. However, this optimism has now dissipated, with the market hoping to see more progress on inflation.

According to CME Group data, interest rate futures indicate that investors now believe there is a probability of over 50% that the Federal Reserve will keep rates unchanged at the September meeting, up from 42% a week ago.