US equities opened firmly in positive territory on Thursday, with the Dow Jones Industrial Average advancing 392 points, even as investors weighed a fresh batch of corporate earnings, elevated crude prices, and ongoing geopolitical friction between the United States and Iran. The S&P 500 rose 0.53%, while the Nasdaq Composite gained 0.63%.
The market's resilience came despite continued military exchanges in the Middle East, which have kept energy supply concerns front and center. Brent crude futures climbed 1.22% on the day, marking a fourth straight session of gains, while West Texas Intermediate hovered near $92 a barrel. Brent traded above $96.
Oil and inflation: a persistent overhang
Rising energy costs have reignited worries that a prolonged conflict could stoke inflation and push the Federal Reserve toward a more hawkish stance. Treasury yields have been under upward pressure as a result, with the benchmark 10-year yield touching 4.818% on Wednesday—its highest level since November 2023—before easing to around 4.75% on Thursday. The 2-year yield also reached its highest point since January 2025 during Wednesday's session.
Fed policy expectations have been volatile. Fed funds futures on Thursday implied a 54.6% probability of a rate hike at the September meeting, down from 63.2% a day earlier. The shift followed comments from Fed Governor Christopher Waller, who signaled support for holding rates steady if upcoming inflation data does not surprise to the upside.
Earnings: Broadcom disappoints, Snowflake shines
Corporate earnings delivered a mixed picture. Broadcom shares tumbled about 5.6% after the semiconductor giant issued a fourth-quarter revenue forecast that missed Wall Street's expectations, underscoring the elevated bar for companies tied to the artificial intelligence investment cycle. In contrast, Snowflake surged more than 21% after reporting better-than-expected second-quarter earnings and revenue, along with strong guidance.
The divergent reactions rippled through the software sector. ServiceNow advanced 6.11%, while Salesforce and Adobe gained 3.14% and 3.7%, respectively. The contrasting moves highlight the uneven sentiment around AI-related spending and its ability to justify current valuations.
Jobs report and yen strength in focus
Investors now turn to Friday's US jobs report for fresh clues on the economy and the Fed's policy path. However, the central bank's continued focus on inflation may temper the market's reaction to the data. A further escalation in the Middle East could complicate the outlook if energy prices add to price pressures.
In currency markets, the Japanese yen strengthened sharply against the dollar, rising more than 1% to around 156.1 per dollar. The yen's advance contributed to a broader decline in global bond yields.
Thursday's gains followed a modest recovery from a three-day losing streak for major US indexes. Historically, September has been a challenging month for equities—nine of the 40 largest one-day declines in S&P 500 history have occurred during this month.
For more on related market moves, see Dow futures slide on yield and oil pressure and gold's decline amid oil and yield pressures.
This article is for informational purposes only and does not constitute financial advice.
