Stock Market Closes Mixed as Treasury Yields Spike on Inflation Concerns
U.S. stock markets showed modest gains as the Dow hit record levels, but bond yields surged with the 30-year Treasury reaching its highest level since 2007, signaling investor anxiety over persistent inflation tied to Middle East disruptions.
Market Performance
The Dow Jones Industrial Average rose to a record close Thursday, gaining 276.31 points, or 0.55%, for a closing record of 50,285.66. The S&P 500 advanced 0.17% to 7,445.72, while the Nasdaq Composite increased 0.09% to end at 26,293.10.
Treasury Yields Surge
The 30-year US Treasury yield just hit 5.2%, its highest level since 2007, as bond investors expressed mounting concerns about inflation durability. Bond traders are starting to think that the recent inflation spike — largely a result of the war shutting off oil flows through the Strait of Hormuz — may not be as "short-term" as Trump has claimed.
Economic Data
Initial jobless claims totaled a seasonally adjusted 209,000 for the week ending May 16, down 3,000 from the prior period and just below the Dow Jones consensus for 210,000, according to the Labor Department. The Philadelphia Federal Reserve's manufacturing index slid to -0.4 for May, down from 26.7 in April and missing the estimate for 19.0.
Consumer Spending
Total card spending per household was up a solid 4.8% on a year over year basis for the week ending May 16, down from 5.5% in the prior week. Excluding gas, spending was up 3.5%, decelerating from 4.1% in the previous week.