Markets are sending a clear signal: US yields are falling sharply, the dollar is weakening, and the Israeli shekel has broken through the 2.83 level. All signs point to investors pricing in a Fed rate cut as soon as the next meeting.

US yields — the decline accelerates

The 10-year Treasury yield has fallen to 4.48%, a one-month low, after starting the week at 4.61%. The 5-year yield dropped to 4.17%, while the 3-month T-bill held at 3.59%. The steepening move in the yield curve reflects a repricing of rate expectations.

Long-dated Treasuries, as tracked by TLT, rose to $85.30 — up 2.7% from mid-last-week's low, approaching year-to-date highs. Capital is rotating out of short-dated paper into longer duration bonds, a textbook move when markets anticipate lower rates ahead.

Dollar weakness broadens

The dollar index (DXY) fell to 99.32, extending its decline from last week. EUR/USD traded around 1.163, its highest level in months. The dollar lost ground against all major currencies as weak US macro data and rate-cut expectations weigh on the greenback.

Shekel surges past 2.83

The Israeli shekel continued its sharp rally, dropping about 2.6% in six trading sessions. USD/ILS now trades at 2.822, down from 2.898 at the start of last week. The rapid shekel appreciation may worry Israeli exporters but benefits importers and consumers.

Equities near highs

The S&P 500 (SPY) traded at $750.46, close to its 2026 high of $752.13 hit earlier this week. Lower yields and a weaker dollar are seen as precursors to easier monetary policy, pushing stocks higher.

Gold retreats despite dollar weakness

Gold prices fell to about $4,424 per ounce, down 2.2% in the last trading session — a surprising move given the dollar's decline. Investors appear to be rotating out of safe-haven assets into risk-on positions as rate-cut expectations grow.

The bottom line

The macro picture is signaling a clear shift: rate-cut expectations are driving a bond rally, weakening the dollar, and strengthening the shekel. All eyes are now on upcoming US employment data to confirm the trend. If jobs data surprises to the upside, the move could stall — but for now, economic pessimism is paradoxically fueling risk assets.