Market Overview - The Chicago Board Options Exchange Volatility Index (VIX) surged nearly 20% last week, indicating increased market volatility [1] - The U.S. market faced a triple hit in stocks, bonds, and currencies, with the 30-year U.S. Treasury yield surpassing 5% and the dollar index dropping to its lowest level of the year [1] - Concerns over rising debt and the impact of Moody's downgrade of the U.S. credit rating have heightened fears, leading to increased Treasury yields and a significant impact on market risk appetite [1][3] Economic Data - Recent U.S. economic data remains robust, with the Manufacturing Purchasing Managers' Index (PMI) rising from 50.2 to 52.3, marking the largest month-over-month increase since June 2022 [3] - The Services PMI also increased to a two-month high of 52.3 from 50.8 [3] - Initial jobless claims decreased by 0.2 thousand to 227 thousand, below the expected 230 thousand, while continuing claims rose by 36 thousand to 1.903 million [3] Federal Reserve Insights - The Federal Reserve is closely monitoring the implications of the U.S. credit rating downgrade and market instability, with officials expressing caution regarding its potential impact on monetary policy [4] - The market anticipates that the Fed's first interest rate cut may be delayed until the fourth quarter of this year [5] Market Sentiment and Risks - The recent surge in long-term Treasury yields has raised concerns, with the 30-year yield reaching over 5%, the highest level since the financial crisis [5][6] - The market is facing renewed fears related to tariffs and trade wars, particularly following President Trump's latest tariff threats against the EU, which have led to significant declines in major stock indices [5][6] - Analysts suggest that the market must navigate several challenges, including potential tariff increases from the EU and the performance outlook of key companies like Nvidia [6]