U.S. stocks advanced on Wednesday as Treasury yields paused after a recent surge that pushed borrowing costs to their highest levels in several years. Investors found some relief as bond markets stabilized, helping major indexes recover from a three-session decline.
The S&P 500 gained 0.46% to close at 7,666.60, while the Nasdaq Composite climbed 0.45% to finish at 26,217.83. The Dow Jones Industrial Average added 295.07 points, or 0.56%, ending the session at 53,061.95. The 30-stock index was supported by gains in shares of Nvidia and Johnson & Johnson.
Treasury yields weigh on markets
Stocks have faced pressure recently due to rising Treasury yields, as investors assessed the potential impact of higher oil prices on inflation. The latest rebound allowed the three major U.S. indexes to break a three-day losing streak.
The benchmark 10-year Treasury yield reached 4.818% on Wednesday, its highest level since November 2023. Bond yields also increased in other major markets, including the United Kingdom, Germany and France. Meanwhile, Japan’s 10-year government bond yield continued trading near multi-decade highs.
“The key driver is oil,” said Jay Hatfield, CEO of Infrastructure Capital Advisors, noting that markets remain rangebound during a seasonally weaker period. According to Hatfield, the recent stabilization in oil prices helped create room for stocks to recover.
Oil prices remain a market focus
Energy markets remained central to investor sentiment as geopolitical tensions continued to influence crude prices. West Texas Intermediate (WTI) crude futures settled nearly 1% higher at $91.01 per barrel, while Brent crude futures closed around $95.63 after gaining roughly 1%.
The increase came after the United States launched additional military strikes against Iran, raising concerns that the conflict could escalate further and potentially disrupt global energy supplies.
Hatfield said he does not expect an immediate peace agreement between Iran and the United States, but believes the recent rise in oil prices may be temporary. He expects the S&P 500 could find a bottom around 7,500 points.
“We believe oil will trend down over the next six months as non-OPEC production ramps up and alternative oil routes develop,” Hatfield said.
Strait of Hormuz remains critical for oil supply
Energy Secretary Chris Wright told CNBC that more than 17 million barrels of oil moved through the Strait of Hormuz on Monday, marking the highest level since the Iran conflict began in February.
The flow of crude through the strategic waterway remains a key factor for global markets, as traders continue monitoring whether geopolitical tensions could affect energy supply chains and contribute to additional inflation pressures.
