Highlights
Stock indexes were mostly higher Thursday with US bond yields retreating on a flight to quality from risky AI and technology shares. The Dow Jones industrial average rose 1.1 percent, the S&P rose 0.3 percent and the Nasdaq eased 0.1 percent. The dollar dropped and WTI oil prices rose.
The drop in bond yields, with the Treasury 10-year yield dropping a stunning 10 basis points on the day, occurred despite news of significantly higher than expected producer price inflation following Wednesday’s hotter than expected consumer price report. Retail sales also topped expectations, suggesting surprising resilience in consumption.
Rotation out of risky stocks into perceived safer sectors continued for a second day as investors appear spooked by a seventh straight decline in the KOSPI, which is regarded as an AI proxy and traders evidently looking for excuses to cut back on the AI trade. Sectors benefitting from the rotation included homebuilders, banks, consumer staples, health care, transports, and aerospace & defense.