In Harmony ... For Now. $Nasdaq100 Bull 3X ETF(TQQQ)$  

Just like that, stocks have had two consecutive weeks of declines. The S&P 500 fell 0.6% today, giving it a weekly loss of 0.1%. The Nasdaq Composite fell 1% on the day and finished the week down 0.7%.  

After a sustained stretch of gains, the lagging performance has investors on edge. Inflation is a renewed worry, sending bond yields gradually higher. Yields on the 2 and 10-year Treasuries rose every day this week, settling Friday at 4.721% and 4.303%, respectively. Both levels are down from their October peaks, but they're a full percentage point higher than they were last spring, when investors were still worried about recession. 

Now the economy is strong, and rates seem stuck. The market has given up on any chance of a rate cut at the Federal Reserve's March meeting that takes place next week. 

Investors are making peace with it all. Since the current rally got going last November, stocks have basically gone straight up -- there hasn't been a single drawdown of more than 2%. The S&P 500 is up 7.3% this year. The Nasdaq is up 6.4%.

The pricing of fed-fund futures shows that investors have finally come to accept the Fed's plan of three rate cuts this year -- that's what the median projection from central bankers showed last December.

Earlier this year, investors were pricing in six cuts for 2024. Now, investors and central bankers are in agreement.

That's good news, but the harmony could be short lived.

Next week, after their meeting, members of the Federal Open Market Committee will release the latest round of projections, the so-called dot plot. That data will be parsed and studied. Has recent inflation data caused the Fed to rein in its plans for cuts? The market has accepted "higher for longer" but it still wants those three quarter-point cuts. Anything less could be an unpleasant surprise for stocks.