Shares of banks and other financial institutions rose as Treasury yields inched higher.
"I think the market is still trying to digest what the sea change in monetary policy is going to mean," said Eric Marshall, president of Dallas mutual-fund firm Hodges Capital.
Mr. Marshall said hopes that the central bank would cut rates by the end of next year are likely unrealistic. "I think a lot of inflation is somewhat structural, and it may take time to come down to the rate that the Fed is talking about, in that 2% area."
Strategists say the stock market is recoiling from an increasingly pronounced inversion of the yield curve, a situation in bond markets that's seen as a harbinger to a recession.
"There are yield curve signals currently suggesting that a wider global recession is on the horizon," said Quincy Krosby, chief global strategist at brokerage LPL Financial.
The stock market is likely to remain on edge until the signals from the yield curve change, strategists said.
"Once you see the yield curve steepen back up, that will tell you the coast is clear," said Mr. Marshall.
Royal Bank of Canada agreed to buy the Canadian unit of British banking giant HSBC Holdings for about $10 billion.
Write to Rob Curran at firstname.lastname@example.org
(END) Dow Jones Newswires
November 29, 2022 17:26 ET (22:26 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.