US financial markets stabilized on Thursday after longer-dated Treasury yields pulled back from multi-decade highs, helping major stock indexes recover from early losses. The benchmark 10-year Treasury yield briefly climbed to 5.342%, its highest level since April 2002, while the 30-year yield also touched a 24-year high. Yields later reversed as bond buyers returned, with the 10-year and 30-year yields falling by 6 and 4 basis points respectively. The two-year yield dropped nearly 10 basis points, on track for its largest daily decline since August 2025.
The S&P 500 added 0.23% to 7,668.82, the Nasdaq Composite rose 0.07% to 26,871.60, and the Dow Jones Industrial Average finished 29.84 points higher at 50,935.89. Sentiment improved as softer inflation data earlier in the week lowered expectations for another Federal Reserve rate increase. Markets were pricing a 28.2% probability of at least a 25-basis-point rate hike at the October meeting, down sharply from 68.6% a week earlier, according to CME FedWatch data.
Economic data still pointed to a resilient labor market and persistent price pressures. Weekly initial jobless claims fell to 197,000, below the 200,000 forecast, while the ISM manufacturing PMI edged down to 54.5 in September from 54.6 in August and showed higher input prices. Fed Vice Chair Philip Jefferson said the central bank could be patient before raising rates again after September's 25-basis-point increase. Minneapolis Fed President Neel Kashkari said additional increases could be needed into 2027 but remained uncertain whether the next move should come this month.
Oil prices remained a key inflation concern. Brent crude settled more than $4 higher after China suspended oil product exports, and Russia extended its diesel export ban. WTI crude traded above $91 a barrel, helping the S&P 500 energy sector gain almost 2%, the strongest among the 11 major sectors. Technology stocks also rose nearly 1%, supported by Accenture's results and Micron Technology's stronger revenue forecast plus $32 billion in customer commitments.
Gold edged higher as softer US inflation data reduced expectations for an October rate hike. Spot gold rose 0.49% to $4,176.16 an ounce, while December gold futures settled 0.54% higher at $4,209.20. HSBC lowered its average gold price forecasts for 2026 and 2027 to $4,490 and $4,825 an ounce respectively, while suggesting the metal could be nearing a bottom.
In separate IPO news, Anthropic is reportedly considering launching its initial public offering as early as mid-November, potentially valuing the AI company between $1.8 trillion and $2 trillion. Anthropic reported a net loss of almost $42 billion in 2025, compared with about $8.3 billion in 2024, while revenue rose to roughly $4.6 billion from $386 million.
Although no digital assets were directly named, cryptocurrency markets often trade as risk assets and could remain sensitive to shifting Federal Reserve expectations, bond market moves, and broader inflation concerns.
