U.S. stocks kicked off October and the fourth quarter with a choppy session, recovering from morning weakness to close slightly higher. A pullback in bond yields from multi-decade highs and a bounce in AI-related chip stocks helped the major averages climb back above the flat line. The 10-year Treasury yield touched about 5.3% earlier in the day, its highest level since 2002, before easing to roughly 5.24%. Rising yields make borrowing more expensive and can weigh on stock valuations, so the retreat gave investors some relief.
What Moved Markets
The Dow Jones Industrial Average finished at 50,926.56, up 20.51 points, or 0.04 percent. The S&P 500 gained 14.91 points, or 0.19 percent, to close at 7,666.45. The Nasdaq Composite rose 10.53 points, or 0.04 percent, to end at 26,871.60.
The session started on shaky footing as fresh manufacturing data added to inflation worries. The ISM manufacturing index showed the sector still expanding, but its prices-paid gauge jumped to 77.9, well above the 72 economists expected, suggesting businesses are facing rising costs. Oil prices also climbed, with Brent crude topping $100 a barrel after reports that China suspended October fuel exports.
Chip stocks and a strong earnings report from Micron turned the tide in the afternoon. Reports that Anthropic may be eyeing an initial public offering as soon as mid-November also supported sentiment toward technology shares. On the economic front, initial jobless claims fell by 1,000 to 197,000 last week, better than expected, and a report from Challenger, Gray and Christmas showed planned layoffs fell in September. Federal Reserve Vice Chair Philip Jefferson said inflation remains too high and that the central bank needs more time to judge where rates should go.
Notable Movers
Micron (MU) rose about 3 percent after the memory chip maker beat expectations for its fiscal fourth quarter, reporting earnings of $33.42 per share on $54.23 billion in revenue, and raised its outlook for the next quarter. The results pointed to continued strong demand for data center hardware.
Bank stocks stayed under pressure. The KBW Nasdaq Bank Index is down more than 13 percent from its mid-August peak as higher interest rates fuel concerns. Citigroup (C), PNC Financial (PNC) and Bank of America (BAC) all traded lower during the session.
Corteva (CTVA) showed a steep drop on screens, but that reflected the company’s split into two separate companies rather than a true loss of value.
Broadcom (AVGO) was in focus after a Reuters report said it is lending $42 billion to Anthropic, which is expected to become the chip designer’s largest compute customer next year. Nike (NKE), trading near its lowest levels since 2014, was due to report earnings after the closing bell.
Looking Ahead
All eyes turn to Friday’s monthly jobs report from the Labor Department, which will give investors a fresh read on the labor market and could shape expectations for the Fed’s next move. Investors will also keep watching Treasury yields and oil prices, which have been the main sources of pressure on stocks, along with Nike’s results and market reaction. September left a wide gap between winners and losers: the Nasdaq gained about 1.8 percent for the month, while the Dow fell roughly 4.3 percent.