Highlights
Major stock indexes rebounded Thursday after President Trump retracted his threat to step up attacks on Iran and said a deal with Iran was near. The Dow Jones industrial average rose 1.9 percent to exactly reverse Wednesday's loss while the S&P 500 gained 1.8 percent and the Nasdaq was up 2.6 percent.
Bond yields, WTI crude oil prices, and the dollar all recovered Wednesday's gains after Trump's latest reversal; all three had been solidly higher in the morning after Trump's threats to bomb Iran again on Thursday night, which suggested the US was setting aside diplomacy in favor of military strikes. Various reports suggested the two sides would soon sign a memorandum of understanding.
The gains came despite another bearish inflation report showing producer prices racing ahead on rising energy prices. The gains also occurred despite a poor reception for the day's 30-year bond auction which priced cheaper than the market at the 1 pm ET auction time.
Among sectors, AI shares including chipmakers and big technology saw heavy bargain-hunting after Wednesday's losses. Oracle was a big winner on a better than expected quarter and strong guidance. Other outperforming sectors included airlines, trucking, big banks, pharma, and home builders.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.