Stocks rose on Thursday as investors weighed several major earnings reports and watched the bond market, as Treasury yields continue to rise.
The Dow Jones Industrial Average added 275 points, or 0.9%. The S&P 500 and Nasdaq Composite rose 0.6% and 0.9%, respectively.
Several strong earnings reports supported the market, with AT&T and IBM stock up 4.7% and 2.8%, respectively, after beating expectations in the year’s final and last quarter.
On the downside, Tesla shares fell nearly 6% after the electric car maker said Wednesday night that it expects to miss its 2022 delivery target. The company also reported quarterly revenue. That missed analysts’ expectations.
Meanwhile, the 10-year Treasury yield hit a high of 4.18% on Thursday, trading briefly at levels not seen since 2008. It last traded near 4.17%. Rising rates have been a headwind for equities throughout the year as the Federal Reserve continues to try to cool inflationary pressures not seen in decades.
Wednesday’s rally in yields contributed to the end of a two-day winning streak for stocks, with the Nasdaq Composite down 0.85%. The high return environment is one reason why many strategists are skeptical that the market can sustain a rally in the near term.
“Despite the recent volatility in the market, expectations of central bank tightening have increased due to inflation
Readings around the world continued to emerge. While there must be more big business
Chris Sinek of Wolf Research said in a note to clients:
On the economic front, weekly jobless claims showed a surprising drop in initial filings, but the Philadelphia Fed showed a contraction in the manufacturing sector.
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