US stocks posted modest gains on Thursday as Treasury yields reversed earlier increases and expectations for another Federal Reserve rate hike eased.
The S&P 500 gained 0.19% to 7,666.45, the Nasdaq Composite edged 0.04% higher to 26,871.60 and the Dow Jones Industrial Average added 20.51 points, or 0.04%, to 50,926.56.
The US 10-year Treasury yield initially climbed to 5.344%, its highest level since 2002, before reversing to trade around 5.24%. The 30-year yield also retreated after reaching its highest level in 24 years. The reversal followed softer US manufacturing data and comments from Fed vice chairman Philip Jefferson, who said policymakers may need more time to assess economic risks. Expectations for an October rate increase fell sharply, with markets pricing around a 28% chance of a 25-basis-point hike, compared with nearly 70% a week ago.
Oil moved higher, with West Texas Intermediate crude gaining 2.7% to settle at US$92.87 a barrel amid continued uncertainty surrounding the Iran war.
Micron gained 3% after reporting strong quarterly earnings, with revenue quadrupling from a year earlier.
Australian Market Outlook
Australian shares are set for a stronger open, with S&P/ASX 200 futures up 45 points, or 0.5%, to 8,678. The reversal in global bond yields and reduced expectations for an imminent Fed rate increase provide a more supportive backdrop for the local market. Oil prices remain a key focus, while investors will continue to assess the outlook for global interest rates after this week’s sharp swings in bond markets.
