U.S. equities hit a record high while Treasuries rallied as markets exhaled a sigh of relief over moderating macroeconomic factors.

Geopolitical tensions, continued tariff worries, and the Senate’s version of the reconciliation bill weighed on markets.

Markets were impacted by positive news from the U.S./China trade agreement that was offset by negative headlines from an escalating conflict between Israel and Iran.

Stocks rose and bond yields increased amid solid labor data, trade discussions, and a high-profile objection to the reconciliation bill.

Lower-than-expected inflation numbers drove a rotation from large growth toward small value stocks and a sharp drop in short duration bond yields.