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US Stocks Rally After Oil Prices Fall 05/20 15:21
US Stocks Rally After Oil Prices Fall
The U.S. stock market bounced back Wednesday after pressure eased on Wall
Street from the bond market and oil prices gave back some of their big gains.
NEW YORK (AP) -- The U.S. stock market bounced back Wednesday after pressure
eased on Wall Street from the bond market and oil prices gave back some of
their big gains.
The S&P 500 climbed 1.1% for its first rise in four days and pulled closer
to its all-time high set last week. The Dow Jones Industrial Average added 645
points, or 1.3%, and the Nasdaq composite rallied 1.5%.
Stocks got a lift from easing yields in the bond market, which offered
relief following rapid climbs that had rattled stock markets worldwide
recently. The yield on the 10-year Treasury fell to 4.57% from 4.67% late
Tuesday, which is a significant move for a market that measures things in
hundredths of a percentage point.
The 10-year Treasury yield had been rising from less than 4% before the war
with Iran began, along with other yields around the world, because of worries
that the fighting will keep oil prices high, among other factors. The inflation
concerns not only seemed to eliminate the chances for a cut to interest rates
by the Federal Reserve this year, they also heightened the risk that central
banks may have to raise rates in 2026.
High yields slow economies and weigh on prices for stocks, cryptocurrencies
and all kinds of other investments. Besides driving up rates for mortgages,
they could also curtail companies' borrowing to build the
artificial-intelligence data centers that have been supporting the U.S.
economy's growth recently.
Yields eased Wednesday as oil prices pulled back some more. The price for a
barrel of Brent crude fell 5.6% to settle at $105.02, though it remains well
above its roughly $70 level from before the war. Prices have been yo-yoing on
rising and falling hopes that the United States and Iran can reach an agreement
to allow oil deliveries to fully resume from the Persian Gulf to customers
worldwide.
A report showing less bad inflation in the United Kingdom than economists
expected also helped calm yields worldwide.
With the easing of yields, technology stocks helped lead Wall Street higher.
Nvidia rose 1.3% ahead of its latest profit report, which is scheduled to
arrive after trading ended for the day, and was the strongest force lifting the
S&P 500. Other tech stocks leading the market included Advanced Micro Devices,
up 8.1%, and Intel, up 7.4%.
Smaller companies can feel even bigger relief from lower yields than their
bigger rivals because many need to borrow to grow. The Russell 2000 index of
the smallest U.S. stocks jumped 2.6%, more than double the gain of the S&P 500,
which measures the biggest U.S. stocks.
Also helping to drive the market was the company behind TJ Maxx, Marshalls
and other stores, which climbed 5.7% after delivering stronger profit and
revenue for the latest quarter than analysts expected. TJX's CEO, Ernie
Herrman, said the current quarter is off to a good start, and the off-price
retailer raised its forecasts for revenue and profit this year.
Red Robin Gourmet Burgers jumped 18.2%, and Cava Group rose 3.1% following
their own better-than-expected profit reports. Such results raise hopes that
households can keep spending and supporting the economy, even though they're
contending with high gasoline prices and widespread discouragement about
economic conditions.
Most big U.S. companies have likewise reported better profits for the start
of 2026 than analysts expected, which has helped stocks run to records. Stock
prices tend to follow the path of corporate profits over the long term.
On the losing side of Wall Street was Target, which fell 3.9% even though
the retailer reported better profit and revenue for the latest quarter than
analysts expected. A new CEO, Michael Fiddelke, is trying to turn around the
company and boost its revenue.
Expectations were high for the company's performance after Target's stock
came into the day with a gain of more than 30% for the year so far, quadruple
the S&P 500's gain.
All told, the S&P 500 rose 79.36 points to 7,432.97. The Dow Jones
Industrial Averae jumped 645.47 to 50,009.35, and the Nasdaq composite rallied
399.65 to 26,270.36.
In stock markets abroad, indexes climbed in Europe following weaker finishes
across Asia.
Tokyo's Nikkei 225 fell 1.2% as the yield on the 10-year Japanese government
bond slipped but remained near its highest level since 1997.
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