US stocks gain as yields cool from earlier highs

In an argument for quarter-point hikes, Bostic said he favored “slow and steady” as the appropriate course of action for the Fed, as the impact of higher interest rates may only start to be felt in the spring.

The yield on 10-year Treasury notes had earlier touched a fresh four-month high of 4.091% after data showed the number of Americans filing new unemployment claims fell again last week, indicating continued strength in the labor market, while a separate report showed U.S. labor costs grew faster than initially thought in the fourth quarter.

The 10-year yield was last up 7.3 basis points to 4.070%.

The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 1.5 basis points at 4.904% after touching a fresh 15-year high at 4.91% earlier in the day.

“The 10 year going over 4% I thought would have a little more of a negative reaction than it actually has,” said JJ Kinahan, CEO of IG North America in Chicago.

“Tough talk has us sell off a little bit but then we bounce back, and even when the numbers look like rates might not have to raise at the pace we thought, we may rally up a little bit but we still can’t continue the rally.”

The Dow Jones Industrial Average rose 275.52 points, or 0.84%, to 32,937.36, the S&P 500 gained 17.45 points, or 0.44%, to 3,968.84 and the Nasdaq Composite added 38.51 points, or 0.34%, to 11,418.00.

Fed funds futures tied to the Fed’s policy rate see about an even chance that the rate will get to a range of 5.5%-5.75% by September, from the current range of 4.5%-4.75%.

Monthly payrolls and consumer prices data in the coming days will offer investors more clues on the path of rates heading into the Fed’s March 21-22 meeting, where it is currently expected to raise rates by 25 basis points.

The S&P 500 was trading just above its 200-day moving average, seen as a key support level by traders, after briefly falling below it for the first time since Jan. 25 earlier in the session.

Salesforce Inc soared 12.40%, set for its best day since August 2020, after the cloud-based software firm forecast first-quarter revenue above analysts’ estimates and doubled its share buyback to $20 billion.

Tesla Inc fell 6.38% after Chief Executive Elon Musk and team’s four-hour presentation failed to impress investors with few details on its plan to unveil an affordable electric vehicle.

Macy’s Inc jumped 10.52%, after the department store operator forecast full-year profit above Wall Street estimates,

Silvergate Capital plunged 56.25% after the crypto-focused lender delayed its annual report and said it was evaluating its ability to operate as a going concern.

Declining issues outnumbered advancing ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored decliners.

The S&P 500 posted 8 new 52-week highs and 13 new lows; the Nasdaq Composite recorded 64 new highs and 139 new lows.