US Stocks Rise Amid Bond Market Uncertainty

Despite the ongoing bond market uncertainty, US stocks have managed to bounce back and trim their losses from a shaky week. The S&P 500 rose 0.4% for just its second gain in the six days since setting its all-time high last week.

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The Dow Jones Industrial Average jumped 517 points, or 1%, and the Nasdaq composite climbed 0.4%. This unexpected surge in the stock market can be attributed to several factors, including the strong performance of individual companies and the growing hopes for continued profit growth.

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Ross Stores Leads the Charge

Ross Stores, a leading off-price retailer, helped lead the way with a 4.4% rise after reporting stronger profit and revenue for the latest quarter than analysts expected. CEO Jim Conroy attributed the company’s success to an increase in new customers and more interest from existing customers, as well as the benefit of refunds on tariffs.

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Most US companies have reported bigger profits for the spring than analysts expected, which has helped drive stocks to records recently. Stock prices tend to follow the path of corporate profits over the long term.

Hopes for continued profit growth got a boost from a preliminary report by S&P Global suggesting growth for US business activity hit a 52-month high. However, the other big lever that helps set stock prices, interest rates, has been much shakier.

Bond Market Uncertainty

After soaring through the summer and then hesitating following this week’s surprise move by the US Treasury Department to repurchase more US government bonds, yields climbed further on Friday. The yield on the 10-year Treasury rose to 4.73% from 4.69% late Thursday.

The 30-year Treasury yield, which the Fed is also targeting with its bond repurchases, also rose and is near its highest level since 2007. Contributing to Friday’s gains for bond yields was continued uncertainty about when the war with Iran will allow oil tankers to freely exit the Persian Gulf again.

That caused oil prices to rise, which affects Treasury yields because they increase worries about inflation. The price for a barrel of Brent crude oil settled at $92.67, up 0.8%.

Crypto and Gold Markets

One of the biggest beneficiaries of US Treasury Secretary Scott Bessent’s move to try to get longer-term yields lower is bitcoin. Cryptocurrencies often rise when interest rates are lower and more money is flowing through the financial system.

Hopes for legislation in Washington to help the crypto industry have also helped it. Bitcoin has climbed above $77,000 from less than $63,000 a week ago. That helped stocks in the crypto industry lead Wall Street.

The price of gold also climbed and briefly topped $4,690 per ounce from less than $4,440 a week earlier. The Treasury Department’s buyback announcement has helped weaken the US dollar’s value against other currencies, which tends to give gold’s price a boost.

That helped drive stocks of miners higher. Newmont climbed 3.1%, and Freeport-McMoRan jumped 7.6%. They helped offset a 5.2% drop for OSI Systems, which sells security screening equipment to airports and other specialized electronic systems.

It reported weaker revenue for the latest quarter than analysts expected, and CEO Ajay Mehra said it was hurt by ‘the Middle East conflicts which shifted the timing of certain planned deliveries.’

Boston Beer sank 2.6% after the seller of Samuel Adams and Dogfish Head said its chief financial officer is leaving the company and announced an interim replacement.

Stock Market Wrap-Up

All told, the S&P 500 rose 33.21 points to 7,674.37. The Dow Jones Industrial Average jumped 517.80 to 53,277.01, and the Nasdaq composite added 113.29 to 26,180.45.

In stock markets abroad, indexes rose in much of Asia and Europe. Hong Kong’s Hang Seng rose 1.2%, and South Korea’s Kospi climbed 0.9% for two of the world’s bigger moves.