U.S. stocks climb, Treasury yields rise as investors await Powell

What’s driving markets

Lingering fears that the Hamas-Israel war may escalate, alongside a spike in benchmark bond yields, kept a lid on stocks’ advance early Thursday, as the tech-heavy Nasdaq took the lead thanks to gains in the so-called “Magnificent Seven” stocks.

Still, investors remained focused on bond yields as the 10-year Treasury yield rose,
BX:TMUBMUSD10Y
moving to within a few basis points of 5%, its highest level since the summer of 2007. It was up roughly 3 basis points on the day, according to FactSet data.

Looking ahead, traders should be eager to hear from Powell when he addresses the the Economic Club of New York at noon. Many will be listening to hear what he might have to say about rising Treasury yields and how they’re impacting the Fed’s thinking after other senior Fed officials said they could be a reason for the central bank to forego further interest-rate hikes.

“Investors are desperate for a bit more clarity on how policy makers view the landscape ahead and want clues on how long they’ve had to wait before cuts are on the cards,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Other Fed officials making comments on Thursday include Chicago Fed President Austan Goolsbee speaking in Madison, Wisconsin at 1:20 p.m., and Fed Vice Chair for Supervision Michael Barr speaking at a Boston Fed conference at 1:30 p.m.

Labor-market data released Thursday came in stronger than expected, as the number of Americans who applied for unemployment benefits last week fell to a nine-month low of 198,000, defying expectations that layoffs would rise as higher U.S. interest impact the economy.

Meanwhile, a gauge of regional business activity published by the Philadelphia Fed remained in contractionary territory for the second straight month in October.

Existing home sales and leading economic indicators, both covering September, will be released at 10 a.m.

Meanwhile, the third quarter corporate earnings reporting season moves on, with results from AT&T
T,
+6.60%
and Blackstone
BX,
-6.18%,
which surpassed expectation. Reports from Western Alliance Bancorp
WAL,
-0.27%,
CSX
CSX,
-0.10%
and Intuitive Surgical
ISRG,
-1.08%
are set to follow after the bell.

In terms of the wider market the results late Wednesday from Netflix
NFLX,
+15.20%
and Tesla
TSLA,
-8.60%
have pretty much canceled each other out, with shares in the streaming giant jumping 12.5% on well-received numbers but the electric vehicle maker losing 7% following cautious comments from Elon Musk.

Tesla was the only maker of the Magnificent 7 to trade in the red early Thursday, while shares of Amazon.com Inc.
AMZN,
+2.24%
were up 2% while shares of chipmaker and AI darling Nvidia Corp.
NVDA,
+1.40%
were up 1.6%.

Companies in focus

• Equifax Inc. shares
  EFX,
  +0.80%
  sank after the credit-score agency cut its outlook for the year, over concerns that high mortgage rates are causing mortgage credit inquiries to track at a 37% decline for the year.
• American Airlines Group Inc.
  AAL,
  +5.50%
  bounced sharply off a three-year low into positive territory early Thursday, even after the air carrier reported third-quarter revenue that came up a bit short and provided a downbeat profit outlook.
• Las Vegas Sands 
  LVS,
  +3.31%
  saw its shares jump, bringing up other casino stocks, after it noted a recovery at its resorts in Macau and Singapore.