Stocks Edge Up as Treasury Yields Retreat From a 24-Year High Before Friday's Jobs Report
Micron's earnings beat lifts chip stocks while the 10-year yield eases to 5.24% from 5.34%. Wall Street expects about 84,000 new jobs in September.
U.S. stocks finished slightly higher Thursday after a rebound in Treasury bonds pulled the 10-year yield back from its highest level since 2002, setting up the September jobs report that arrives Friday morning.
The S&P 500 rose 0.19 percent to 7,666.45. The Nasdaq Composite gained 0.04 percent to 26,871.60, and the Dow Jones Industrial Average edged up 0.04 percent to 50,926.56. Stocks had been lower in the morning after the 10-year Treasury yield briefly climbed to 5.34 percent, then recovered as bonds bounced and the yield slipped to about 5.24 percent.
Chip stocks led the comeback. Micron beat Wall Street's expectations and raised its guidance for the current quarter, and one analyst called the results "incredibly impressive" given how high forecasts already were. The strength spread across semiconductors, which have been the market's main engine this year.
Technology shares also got a boost from reports that Anthropic may pursue an initial public offering as soon as mid-November, and from news that Broadcom has arranged a $42 billion lending facility for the AI company. The reports underscore how tightly the largest technology companies and AI developers are now tied together financially.
The bond market is the bigger story. Treasuries just finished their worst quarter in decades, and the pressure has fallen on banks, whose stocks tumbled Thursday as rising rates cut into the value of their holdings. A manufacturing survey showed expansion but also signs of persistent inflation pressure.
The labor market, meanwhile, keeps showing resilience. First-time claims for unemployment benefits fell to 197,000 last week, the fourth straight weekly decline and below the 200,000 economists expected. Layoff announcements in September were down 20 percent from a year earlier.
That sets up Friday's report from the Labor Department. Wall Street expects employers added about 84,000 jobs in September, according to CNBC's survey of economists, with Reuters and Bloomberg polls pointing to roughly 90,000 and FactSet at 95,000. The unemployment rate is forecast to hold at 4.1 percent, with wages up about 0.3 percent for the month. August was a surprise, with payrolls up 162,000 and prior months revised higher.
Investors have been reducing bets that the Federal Reserve will raise rates again at its October meeting, helped by softer inflation data and more dovish comments from Fed officials. A weaker jobs number would cement the case for a hold, while a strong one could revive worries about another hike. Economists say Friday's report matters less to the Fed than the inflation figures due in mid-October.
