Bond Yields, Oil Prices Send US Stocks on Wild Ride
US stocks ended Thursday's trading session nearly flat after a volatile day of fluctuations driven by bond yields and oil prices. The S&P 500 finished with a minimal decline of less than 0.1%, while the Dow Jones Industrial Average dropped 161 points, or 0.3%. The Nasdaq composite added less than 0.1% to its value.
The sharp swings in stock prices were largely influenced by the rising yields on 10-year Treasury bonds, which climbed to 5.20% from 5.11% late Wednesday. This increase in bond yields makes borrowing more expensive and puts downward pressure on stocks and other investments.
Oil prices also contributed to the market's uncertainty, with Brent crude prices fluctuating between $102 and $99 per barrel midday Thursday before settling at $100.22, up 2.1% from the previous day.
The solid US economy continues to support higher bond yields, as evidenced by a report showing fewer workers applied for unemployment benefits last week. This has strengthened expectations of further interest rate hikes by the Federal Reserve, which could convince traders that the Fed may raise rates twice more by the end of the year.