Wall Street stocks opened higher on Thursday, with the S&P 500 gaining 0.5% and the Dow Jones Industrial Average adding 340 points, or 0.6%, as bond yields continued to ease. The Nasdaq composite also rose 0.7%. These gains follow a three-day slide for the major indexes.
Investor sentiment appears to be responding positively to easing bond yields, with the 10-year Treasury yield dropping to 4.75% from 4.79% on Wednesday. The yield on the 2-year Treasury, a closely watched indicator for Federal Reserve interest rate expectations, slid to 4.32% from 4.39%.
Despite the positive market performance, oil prices continued their upward trajectory. Benchmark U.S. crude rose 1.2% to $92.12 a barrel, and international Brent crude increased 0.6% to $96.23 per barrel. This rise in oil prices is attributed to the intensifying six-month conflict between the U.S. and Iran. Earlier in the week, the U.S. conducted airstrikes on Iranian rocket launchers in the Strait of Hormuz, citing intelligence that Iran was planning to use them to target maritime traffic. Iran responded by firing on Kuwait on Thursday.
The renewed hostilities have contributed to an 11% surge in U.S. crude prices this week and have added to existing inflationary pressures, which had previously exacerbated a bond-market sell-off. However, the current stabilization in bond yields suggests a potential easing of those pressures.
In economic news, the Labor Department reported an increase in unemployment benefit filings for the past week. Nevertheless, layoffs remain infrequent, and jobless claims are at historically low levels. All eyes will be on Friday's crucial U.S. employment report for August.
Globally, markets in Europe saw gains, while Asian markets experienced mixed results.