Stock market today: Dow, S&P 500, Nasdaq stage comeback as Treasury yields fall, chip stocks gain

The major averages recovered after a choppy session on Thursday.

The Dow Jones Industrial Average (^DJI) closed just above the flat line. The S&P 500 (^GSPC) increased by 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) inched higher.

Stocks sank to session lows after long-dated bond yields climbed higher. By afternoon, trading the 10-year Treasury yield had eased, despite a jump in oil prices.

Tech stocks gained on Thursday, with semiconductors leading the charge after memory maker Micron’s (MU) strong results.

Yahoo Finance’s Jennifer Schonberger reports:

Federal Reserve Vice Chairman Philip Jefferson struck a more cautious tone than several of his colleagues this week, acknowledging that inflation has remained too high, but urging that as bond markets send long-term yields higher, the central bank should watch and assess whether inflation will come down in a timely manner.

“Since our September meeting, yields across the term structure have increased further, a sign that investors are reassessing the evolving macroeconomic landscape,” Jefferson said in a speech on Thursday at the University of Virginia in Charlottesville. “My colleagues and I will need to come to our own judgment, which may take more time.

Read more here.

US bank stocks tumbled on Thursday, extending recent losses as the sharp rise in interest rates over the past month fueled concerns.

The KBW Nasdaq Bank Index (^BKX), which closely tracks the nation’s large banks, tumbled as much as 2.4% before paring some of those losses to trade 0.7% below its Wednesday closing price. The index has retreated to its level set in late May and is down more than 13% from its peak in mid-August.

Major stock indexes slipped as fresh manufacturing readings added to mounting investor concerns about inflation, following an already sharp rise in interest rates over the past month.

A number of big banks are taking even harder hits. Shares of Citigroup (C) and PNC (PNC) fell 1.9% and 1.8%, respectively, while shares of Bank of America (BAC) declined 1.4%.

US bond yields have surged upward over the past month, as yields on both the 10-year Treasury and 30-year Treasury have reached levels not seen since 2002, surpassing 2007 high-water marks in the lead-up to the financial crisis.

One source of upward pressure, argues Macquarie’s Thierry Wizman, is not just the impact of the Iran war on energy markets but also uncertainty about when it will end or what the conflict will look like going forward.

“The perception that global conflict is endemic, may also be causing long-term inflation expectation to stay elevated,” Wizman wrote to clients.

The uncertainty factor for investors centers around the midterm elections. While President Trump has said he expects the war to wrap up shortly after the US midterms, the president has also said he is considering a major renewed bombing campaign after the elections, which would likely push the conflict back into “hot war” territory.

That makes it difficult for investors to evaluate what Wizman says is a critical component: the conflict’s impact on government spending. At face value, the shuttering of the Strait of Hormuz and attacks on energy infrastructure throughout the Gulf region have sent energy prices soaring, depressing bond prices as investors price in higher inflation rates for longer. But wars are also expensive to fight.

The latest figures submitted to Congress by the Pentagon say the US government has so far spent at least $43.6 billion, though outside research institutions posit the actual sum could be far higher.

“We’ve highlighted before how the US-Iran conflict is one of the culprits behind higher bond yields, not just because it is associated with higher inflation (through an adverse supply shock) but because it is associated with a higher deficit and larger borrowing needs,” Wizman wrote.

US stocks edged higher at the open for the first day of October.

The Dow Jones Industrial Average (^DJI) wavered near the flat line, and the S&P 500 (^GSPC) increased by 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) rose 0.3%.

Underneath the surface of major indexes, stock performance ended September with a growing divergence. AI-driven tech stocks powered through while the rest of the market remains pressured by rising government bond yields and elevated oil prices (CL=F, BZ=F).

Pressure isn’t letting up in the bond market. Earlier Thursday, the benchmark 10-year Treasury yield eased slightly after briefly climbing to 5.34%, its highest level since 2002.

A surprising new bull has entered the bitcoin space: Citigroup. Citi analyst Alex Saunders on Thursday raised his base case price forecast on bitcoin (BTC-USD) to $113,000 from $82,000.

“The increase draws from all three components of our process: activity, macro, and ETF flows. Debasement fears alongside SEC agency rulemaking, spurred paradoxically by the failed Clarity Act, helped crypto reclaim technical levels. ETF inflows resumed as prices broke above 200-day moving averages. We now assume $5 billion base-case inflows over 12 months, up from flat, given positive sentiment,” Saunders said.

Bitcoin just notched its strongest quarter since 2024, leaving gold and other assets in the dust despite rising Treasury yields and commodities prices.

The digital asset gained about 43% in the third quarter. It’s still down about 4% year to date, however.

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Layoff plans fell in September to the lowest levels for the month since 2022. But companies don’t appear to be rushing to add staff.

US employers announced 43,281 job cuts in September, a 20% drop from September 2025, according to outplacement firm Challenger, Gray & Christmas. Through September of this year, layoff announcements are down sharply compared to last year, dropping 39% overall and 15% excluding government workers.

Technology companies continued to be responsible for the bulk of the latest layoffs, announcing 10,799 cuts in September. Nearly a third of all announced job cuts came from tech companies, leading all other sectors.

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