Big Drop In Bond Yields Fuels Monster Rally In Dividend Stocks

Markets last week performed like a long-bedridden flu patient who finally broke their fever and started feeling fine enough to dance. Multiple catalysts contributed to the biggest weekly drop in long-term interest rates since mid-March that sprung stocks out of a monthlong slump. The bounceback rally sent the S&P 500 Index 5.95% higher for the week and back above its 50-day moving average.

Every sector posted gains, ranging from 9.3% for telecommunications services to 2.4% for the energy sector, which was pressured by crude oil’s 5.9% decline to a two-month low of $80.51 per barrel. Real estate (+8.7%) and financials (+7.4%) were also big beneficiaries of falling bond yields. In terms of size, small stocks were in the sweet spot: the Russell 2000 Small Cap Index surged 7.6% on the week.