US Stocks End Flat as Bond Market Uncertainty Lingers

US stocks ended Thursday's trading session nearly flat after experiencing a series of sudden reversals throughout the day. The S&P 500 index finished the day with a negligible decline, while the Dow Jones Industrial Average dropped 161 points, or 0.3%. The Nasdaq composite, however, edged up by less than 0.1%.

The bond market's influence on stocks has been a major concern in recent days, as rising Treasury yields have slowed economic growth and undercut stock prices. On Thursday, the yield on the 10-year Treasury jumped to 5.20%, its highest level since 2007, before eventually returning to 5.17%. This fluctuation is partly due to uncertainty surrounding the conflict with Iran, which has caused oil prices to be volatile.

Oil prices have been particularly erratic, with Brent crude trading from $102 to $99 in a matter of minutes during midday Thursday. The price later settled at $100.22, up 2.1% from the previous day.

The strong US economy has contributed to rising Treasury yields, as well as concerns about inflation and expensive oil. A recent report showed that fewer U.S workers applied for unemployment benefits last week, further solidifying expectations of a robust economy. This has led some traders to believe that the Federal Reserve may raise interest rates twice more by the end of the year.

Despite these headwinds, US companies have continued to deliver strong growth in profits, which has helped maintain relatively stable stock prices. Strategists at Barclays noted that 'the underlying drivers of growth remain intact' and that 'as long as AI-related investment, US corporate profitability, and consumer spending continue to beat expectations, the economy and markets seem capable of absorbing tighter central banks and higher rates.'