US Fed, trade and earnings news to feed fight between bulls and bears

ONE step forward, two steps back. US stocks fell last week and briefly tested their lows of the year as bulls and bears fought furiously over the direction of the market and the economy.

There was data to embolden both sides in the battle last week and this week is likely to see a similar zig-zag pattern as the Federal Reserve makes a policy statement, a trade war brews and one of the strongest earnings seasons in years continues.

For the bears, the first milestone of the week was the surge in the 10-year Treasury yield to over 3 per cent, which triggered a sell-off in stocks because of fears it would lead to higher borrowing costs.