U.S. stocks are drifting Thursday as crude oil prices continue to climb and signals suggest the economy remains solid.
The S&P 500 was 0.4% lower in midday trading after flipping between modest gains and losses earlier in the day.
The Dow Jones Industrial Average was down 273 points, or 0.6%, as of 11 a.m. Eastern Time, while the Nasdaq composite slipped 0.3%.
Oil prices surged again amid anticipation of Israel’s response to Iran’s missile attack on Tuesday. A barrel of Brent crude, the international benchmark, climbed 3.9% to $76.80 after starting the week below $72.
The situation with Iran, as a major oil producer, has raised concerns that an escalation could affect neighboring countries integral to the crude flow. However, signals indicating that oil supplies remain ample are helping to keep prices in check.
In the bond market, Treasury yields rose following reports on the U.S. economy.
One indicated that growth in real estate, healthcare, and other service businesses accelerated to its strongest pace since February 2023, surpassing economists’ expectations, although employment trends may be slowing.
A separate report suggested that layoffs across the United States remain relatively low. While slightly more workers filed for unemployment benefits last week, the numbers remain low compared to historical averages.
Stocks are close to record highs due to hopes that the U.S. economy will continue to grow, especially after the Fed cut interest rates for the first time in more than four years last month. The Fed signaled more cuts could arrive through next year.
China is also discussing more aid for its economy, and “when the top policymakers in the world’s two largest economies are determined to support economic growth, it pays to listen,” says Evan Brown, head of multi-asset strategy at UBS Asset Management. He cautioned against underestimating policymakers’ resolve to mitigate recession risks.
Elsewhere, the government will release its latest monthly update on the jobs market on Friday, with economists predicting a slight slowdown from August.
Levi Strauss dropped 7.9%, despite reporting better profits for the latest quarter than analysts expected, with revenue falling short of forecasts. Conversely, gains for Nvidia and other AI-related stocks helped offset losses, with Nvidia rising 3.1%.
The yield on the 10-year Treasury rose to 3.82% from 3.78% late Wednesday. The two-year yield increased to 3.68% from 3.64%.
In international markets, Japan’s Nikkei 225 jumped 2% amid speculation about the central bank’s potential interest rate hike. In Hong Kong, the Hang Seng gave back 1.5%, while Chinese stocks surged on hopes for recent announcements from Beijing aimed at bolstering the economy.
This article includes reporting from The Associated Press.
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