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S&P 500 hits record high as rate hike odds drop, municipals outperform Treasuries.

Market News
18 Aug 2026
Seeking Alpha
View Source
Neutral
S&P 500 hits record high as rate hike odds drop, municipals outperform Treasuries.

U.S. equity markets ended the week mixed but resilient, with the S&P 500 reaching a new record high. Market expectations for a Federal Reserve rate hike in September have dropped sharply from 72% to 32%, influenced by softer inflation data and weaker retail sales. Tax-exempt municipal bonds showed strong performance, outperforming U.S. Treasuries, especially in intermediate and longer maturities. Treasury yields were mixed, with short-term yields falling and longer-term yields rising slightly, while investment-grade corporate spreads widened and taxable municipal spreads tightened.

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