Stocks Rebound as Treasury Yields Ease, AI Shares Recover
U.S. shares recovered on October 1 as Treasury yields pulled back from multidecade highs and the AI trade regained momentum. Micron’s strong earnings, a report…
NEW YORK — stock market today trading turned higher on October 1 as U.S. stocks recovered from early losses, helped by easing Treasury yields and a fresh bounce in AI-linked shares. The Dow Jones Industrial Average moved above the flat line, while the S&P 500 rose 0.2% and the Nasdaq Composite posted a small gain.
The move came after a volatile morning. The 10-year Treasury yield slipped to 5.24% after climbing earlier in the day to 5.3%, a new multidecade high. That reversal gave traders some room to buy back risk assets, even as higher borrowing costs and oil prices kept pressure on the market.
Yields, oil and AI set the tone
Stocks had been under strain as the bond market pushed to levels not seen in years. CNBC reported the 10-year U.S. Treasury yield hit an intraday high of 5.344%, the highest since 2002, before turning lower later in the session. The 30-year bond yield also touched levels not seen in 24 years.
Jeff Kilburg, CEO of KKM Financial, said the bond market looked tired after a sharp climb. “I think there's some fatigue in the bond market. We moved 50 basis points in 18 trading days after Fed Chairman [Kevin] Warsh kind of messaged at Jackson Hole that indeed a rate hike was coming,” he said. “I think there's also a little bit of optimism that this is going to be a short-lived move to 5%. Of course there has to be an Iranian solution for that to be enabled.”
Oil did not make things easier. West Texas Intermediate crude futures gained 2.7% to settle at $92.87 a barrel as traders waited for President Donald Trump’s next move in the Iran conflict and weighed whether he would wait until after the midterms before taking further military action.
That mix matters because it leaves Wall Street split between two forces: tighter financial conditions from higher yields and renewed enthusiasm around artificial intelligence. A report from Bloomberg that Anthropic is eyeing an IPO as soon as mid-November helped boost tech stocks in midday trading. Investors also got another reminder of how tightly linked the major AI players have become.
According to a Reuters report cited in the Yahoo Finance live blog, Broadcom is lending $42 billion to Anthropic. In turn, Anthropic is estimated to become the chip designer’s largest compute customer by next year. The news helped keep semiconductor shares in focus after a morning that started with caution.
Micron gives traders a fresh catalyst
Micron was one of the clearest winners. The memory giant reported fourth-quarter earnings that beat Wall Street’s expectations and raised its first-quarter outlook. CNBC said the stock closed up 3% on the day after posting blockbuster results, including revenue that quadrupled last quarter.
Micron’s update also showed how strong demand in parts of the chip market can still outweigh the broader rate jitters. The company said it is reaping 87% profit margins, though it plans to raise worker pay, which it said will dampen margins relative to Street expectations. “We are very pleased and proud to be able to incentivize our team members in line with our record performance,” Micron CEO Sanjay said.
Labor data added one more piece to the picture. Initial jobless claims fell for the fourth week in a row, a sign the labor market remains broadly stable. Challenger, Gray & Christmas also said layoff plans declined in September, even as companies are not rushing to hire. Traders will now turn to Friday’s monthly jobs report for the next read on whether that stability holds.
Nike is set to report earnings after the bell, and the company’s turnaround effort remains under pressure. The stock is trading at its lowest levels since 2014, a stark backdrop heading into another busy stretch for markets already wrestling with yields, oil and the AI boom.
For now, the message from October’s opening session is blunt. Higher rates are still the obstacle. But not every rally has vanished.
Source: finance.yahoo.com
