The US stock market bounced back on Wednesday after pressure eased on Wall Street from the bond market and oil prices gave back some of their big gains.
The S&P 500 climbed 1.1% for its first rise in four days and pulled closer to its all-time high set last week. The Dow Jones Industrial Average added 645 points, or 1.3%, and the Nasdaq composite rallied 1.5%.
All told, the S&P 500 rose 79.36 points to 7,432.97. The Dow jumped 645.47 to 50,009.35, and the Nasdaq lifted 399.65 to 26,270.36.
Bond pressure eases
Stocks got a lift from easing yields in the bond market, which offered relief following rapid climbs that had rattled stock markets worldwide recently. The yield on the 10-year Treasury bond fell to 4.57% from 4.67% late on Tuesday, which is a significant move for a market that measures things in hundredths of a percentage point.
The 10-year Treasury yield had been rising from less than 4% before the war with Iran began, along with other yields around the world, because of worries that the fighting will keep oil prices high, among other factors. The inflation concerns not only seemed to eliminate the chances for a cut to interest rates by the Federal Reserve this year, they also heightened the risk that central banks may have to raise rates in 2026.
High yields slow economies and weigh on prices for stocks, cryptocurrencies and all kinds of other investments. Besides driving up rates for mortgages, they could also curtail companies’ borrowing to build the artificial-intelligence data centres that have been supporting the US economy’s growth recently.
Oil prices pull back
Yields eased Wednesday as oil prices pulled back some more. The price for a barrel of Brent crude fell 5.6% to settle at $US105.02, though it remains well above its roughly $US70 level from before the war. Prices have been yo-yoing on rising and falling hopes that the United States and Iran can reach an agreement to allow oil deliveries to fully resume from the Persian Gulf to customers worldwide.
A report showing less bad inflation in the United Kingdom than economists expected also helped calm yields worldwide.
Tech stocks lead Wall Street higher
With the easing of yields, technology stocks helped lead Wall Street higher.
Nvidia rose 1.3% ahead of its latest profit report, which arrived after trading ended for the day, and was the strongest force lifting the S&P 500. The chip company reported another quarter of bigger growth in profit and revenue than analysts expected, while it also gave a better-than-expected forecast for revenue in the current quarter.
Smaller companies can feel even bigger relief from lower yields than their bigger rivals because many need to borrow to grow. The Russell 2000 index of the smallest US stocks jumped 2.6%, more than double the gain of the S&P 500, which measures the biggest US stocks.
Global markets split
In stock markets abroad, indexes climbed in Europe following weaker finishes across Asia.
Tokyo’s Nikkei 225 fell 1.2% as the yield on the 10-year Japanese government bond slipped but remained near its highest level since 1997.
The Associated Press
