Thursday saw the U.S. stock market displaying mixed performance as 10-year Treasury yields approached the 5% threshold, only to recover in response to Federal Reserve Chair Jerome Powell‘s opening remarks prior to his Economic Club of New York address, prompting traders to scale back their expectations for interest rate increases.

The FOMC is now proceeding carefully, acknowledging that substantial tightening in financial conditions can result from an increase in bond yields, subsequently affecting policy decisions, Powell said. A period of above-trend growth may still imply “meaningful tightening” of interest rates, he said.

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