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Stocks rose on Thursday, attempting to rebound from a sell-off as Treasury yields marched higher and investors digested a speech by Federal Reserve Chair Jerome Powell.
The Dow Jones Industrial Average (^DJI) was down about 0.1% while the S&P 500 (^GSPC) fell 0.2% and the Nasdaq Composite (^IXIC) dropped 0.3%.
Treasury yields climbed for the fourth day in a row, keeping up the pressure on stocks, as investors kept a wary eye on developments in the Middle East conflict.
The benchmark 10-year yield (^TNX) closed in on reaching 5% for the first time in 16 years, while the 2-year yield — seen as a guide to interest rate expectations — jumped to its highest since 2006 around 5.24%.
Powell said Thursday that inflation is still too high, signaling that the Fed intends to hold interest rates high for an extended period of time as economic growth remains strong. In recent days, some strategists, including Mohamed El-Erian, have questioned whether it’s time for the central bank to raise its target for inflation.
Investors are also watching for any potential impact of elevated interest rates on corporate performance as the third quarter earnings season rolls on.
Tesla (TSLA) CEO Elon Musk said Wednesday he was worried that higher borrowing costs would prevent customers from affording the company’s electric vehicles, speaking after the company’s earnings missed estimates. Tesla shares fell 9% in early trading.
Meanwhile, Netflix (NFLX) shares jumped around 15% after the streamer posted a surge in subscriber numbers and said it will raise prices in the US.
Earnings results flooded in Thursday morning, with American Airlines (AAL) shares rising as the company reported record third quarter revenue. AT&T (T) stock popped as the company added more wireless subscribers than Wall Street had expected.
In economic data, weekly jobless claims hit their lowest levels since January, as the US labor market continues to show strength.
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