US Stocks Fluctuate as Bond Market Yields Rise Amid Oil Price Uncertainty
The US stock market had a shaky day on Thursday, with stocks barely changing from their opening values. The S&P 500 index finished nearly flat, down by 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 market's lackluster performance can be attributed to pressure from the bond market, which saw yields on the 10-year Treasury jump to 5.20% from 5.11% late Wednesday. This increase in yields makes borrowing more expensive and can slow down economic growth. The yield is now back to its level in 2007.
The price of oil also played a role in the market's volatility, with Brent crude fluctuating between $102 and $99 per barrel before settling at $100.22, up 2.1% from the previous day. Uncertainty surrounding the war with Iran has contributed to the uncertainty in oil prices.
Despite these challenges, the US economy continues to expand, which supports higher yields on bonds. A report released Thursday showed a decrease in unemployment claims, further strengthening expectations for economic growth. This could lead to more interest rate hikes by the Federal Reserve, which raised its main interest rate last week to slow down the economy and combat inflation.