Stock market today: Wall Street ticks higher as pressure eases from the bond and oil markets

NEW YORK -- Wall Street ticked higher Thursday to trim its sharp loss for September after pressure squeezing it from the oil and bond markets relaxed a bit.

The S&P 500 rose 25.19, or 0.6%, to 4,299.70. The Dow Jones Industrial Average added 116.07 points, or 0.3%, to 33,666.34, and the Nasdaq composite gained 108.43, or 0.8%, to 13,201.28.

A drop in oil prices took some heat off the stock market, a day after crude reached its highest price of the year. Treasury yields also relaxed to give the stock market more of a breather, particularly Big Tech companies.

A 2.1% climb for Meta Platforms and 1.5% gain for Nvidia were two of the strongest forces lifting the S&P 500.

Stocks, though, are still on track for their worst month of the year as Wall Street grapples with a new normal where interest rates may stay high for a while. The Federal Reserve has pulled its main interest rate to the highest level since 2001 in hopes of extinguishing high inflation, and it indicated last week it may cut rates by less next year than earlier expected.

It’s a sharp departure from prior years for investors, who counted on the Fed to cut rates quickly and sharply whenever things looked dicey. Lower rates can goose financial markets, while high rates slow the economy by design and hurt prices for stocks and other investments.

The threat of higher rates for longer has pushed Treasury yields up sharply in the bond market. The yield on the 10-year Treasury climbed above 4.67% in the morning, near its highest level since 2007. It later fell back to 4.57%, down from 4.61% late Wednesday.

The two-year Treasury yield, which moves more on expectations for Fed action, slipped to 5.06% from 5.14%.

Yields squiggled following the latest batch of reports on the economy.

One said fewer workers applied for unemployment benefits last week than economists expected. It's the latest signal of a solid job market, one that has helped prevent a recession but may also be feeding upward pressure into inflation.

A separate report said the U.S. economy grew at a 2.1% annual rate during the summer, following some revisions to earlier estimates. That was below economists’ expectations, but economic growth looks like it’s remained solid through the third quarter at least. The question is how the trend goes in the final three months of the year.

Altogether, the reports didn't give anything to change investors' minds about the Fed staying tough on interest rates, something that Wall Street calls a “hawkish” stance on policy.

“The waiting Game continues,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.

“Until there’s a clear break from this holding pattern, investors will be living with a hawkish Fed, higher-for-longer interest rates and, likely, additional market volatility,” he said.

Many other challenges are also looming over the economy and Wall Street besides the threat of higher interest rates for longer.

Most immediate is the threat of another U.S. government shutdown as soon as this weekend, though financial markets have held up rather well during past shutdowns.

Another threat eased a bit, as crude oil prices pulled back. A barrel of benchmark U.S. crude oil sank $1.97 to settle at $91.71. It's still up sharply from below $70 during the summer, which has added to worries about inflation. Brent crude, the international standard, also fell by more than $1 per barrel.

On Wall Street, Peloton Interactive jumped 5.4% after the online exercise bike and fitness company announced a five-year partnership with athletic wear maker Lululemon Athletica.

Trimble rose 6.5% after it said it will get $2 billion in cash and a 15% ownership stake in a joint venture with agricultural machinery company AGCO. Trimble will contribute much of its precision agriculture business to the joint venture. AGCO rose 2.8%.

On the losing end of Wall Street, Micron Technology slumped 4.4% despite reporting better results for the latest quarter than analysts expected. Its forecast for upcoming profitability fell short of some analysts’ estimates.

In stock markets abroad, the Hang Seng fell 1.4% in Hong Kong as trading in shares of property developer China Evergrande Group was suspended. The company said authorities had informed it that its chairman, Hui Ka Yan, had been subjected to “mandatory measures in accordance with the law due to suspicion of illegal crimes.”

Evergrande is the world’s most heavily indebted real estate developer and is at the center of a property market crisis that is dragging on China’s economic growth.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.