Stocks steady as yields blink; S&P 500 edges higher as energy leads

After an early scare from Treasury yields spiking to multi‑decade highs, rates eased and stocks managed small gains, breaking a three‑day slide. Leadership rotated toward energy while defensives lagged, as a softer manufacturing read and steady jobless claims nudged odds of an October rate hike lower. Europe sold off on its own rates volatility, underscoring how bond swings remain the market’s primary driver.

KEY HEADLINES & MARKET MOVERS

Rates rollercoaster set the tone: Yields surged to their highest levels in more than two decades intraday before retreating, a whipsaw that kept equity multiples in check but ultimately allowed indexes to finish slightly positive. The S&P 500 snapped its losing streak while the Dow and Nasdaq also inched up, a modest win given the earlier bond spike. Overseas, European equities tumbled as their own yield moves amplified risk aversion, highlighting the global nature of the rates shock.

Data cools near‑term hike bets, but price pressures linger: ISM manufacturing eased slightly and S&P Global’s gauge was revised lower, while initial jobless claims remained historically low—an unusual mix that trimmed the odds of an October hike without signaling clear weakness. The tug‑of‑war is visible inside the ISM details: prices paid jumped, a reminder that inflation progress may be uneven. The dollar pushed to a fresh year‑to‑date high earlier before overbought signals emerged, and the yen steadied as intervention risk stayed in the air.

Earnings sparks: Accenture pops; chips and energy draw bids: Accenture’s beat-and-raise ignited IT services and added a welcome micro tailwind on a macro‑driven day. Semis and optical‑communications shares climbed, extending the AI‑spend narrative even as one high‑profile memory report earlier failed to wow the tape. Meanwhile, energy outperformed as crude stayed firm, offsetting weakness in traditional defensives like health care.

Focus turns to Friday’s jobs report and whether yields keep receding—two variables that will dictate risk appetite and sector leadership into next week. Watch breadth: if energy and AI‑exposed tech continue to carry the load while defensives lag, rallies may stay brittle. Any Fed speak that leans cautious on near‑term hikes but firm on inflation could keep the market range‑bound until the next catalyst.

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