Swaps now fully price in a full quarter-point rate cut in December, versus November a day earlier. Growth in activity at service providers this month was the fastest in a year and manufacturing output expanded at a quicker pace. Such resilience is making it difficult for inflation to cool, helping explain why the Fed is intent on keeping rates higher for longer.

“Fed members have indicated they want to see more progress on inflation – fortunately the US economy still looks robust enough to take an extended rate pause,” said Don Rissmiller at Strategas Securities. “We continue to look for the first Fed rate cut in September.”

Treasury two-year yields climbed seven basis points to 4.94%. The dollar edged up. Bitcoin fell over 4%. Oil and gold retreated.

US policymakers earlier this month coalesced around a desire to hold rates higher for longer and “many” questioned whether policy was restrictive enough to bring inflation down to their target, according to Fed minutes released this week.

“The minutes are a reminder that while the Fed does not see another rate hike as likely — and certainly does not see it as a base-case — it will not rule out hikes if inflation does not behave,” said Chris Low at FHN Financial.

Meantime, another round of blowout earnings from artificial-intelligence darling Nvidia and the economy’s steady advance mean the S&P 500 likely has further room to rise, according to JPMorgan Chase & Co.’s trading desk.

“With the AI-theme still delivering and the macro hypothesis intact, we are likely to continue to make new all-time highs,” the team including Head of US Market Intelligence Andrew Tyler wrote in a note to clients.

Key events this week:

• Japan CPI
• Canada retail sales
• Germany GDP
• US durable goods, consumer sentiment, Friday
• Fed’s Christopher Waller speaks, Friday

Some market moves:

Stocks

• The S&P 500 fell 0.7% as of 4 p.m. New York time
• The Nasdaq 100 fell 0.4%
• The Dow Jones Industrial Average fell 1.5%
• The MSCI World Index fell 0.6%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro fell 0.1% to $1.0809
• The British pound fell 0.2% to $1.2693
• The Japanese yen was little changed at 156.88 per dollar

Cryptocurrencies

• Bitcoin fell 4.3% to $66,428.35
• Ether fell 5.7% to $3,534.98

Bonds

• The yield on 10-year Treasuries advanced five basis points to 4.48%
• Germany’s 10-year yield advanced six basis points to 2.60%
• Britain’s 10-year yield advanced three basis points to 4.26%

Commodities

• West Texas Intermediate crude fell 0.9% to $76.87 a barrel
• Spot gold fell 2% to $2,331.70 an ounce