Dow jumps more than 550 points for best day since June as bond yields recede: Live updates

Stocks gained Thursday as Treasury yields fell, with investors betting the Federal Reserve could be done raising rates for 2023.

The Dow Jones Industrial Average traded 564.5 points higher, or 1.7%, to settle at 33,839.08, garnering its best day since June. The S&P 500 added 1.89% and closed at 4,317.78, for its best day since April. It was also the first time the S&P 500 posted back-to-back gains of more than 1% since February. The Nasdaq Composite climbed 1.78% and settled at 13,294.19, marking its best session since July.

On a weekly basis, the S&P 500 is up about 4.9%, and the Dow is up 4.4%. The Nasdaq is on pace for a gain of more than 5%.

The rally was broad-based, with all 11 S&P 500 sectors ending the day in positive territory. Gains were led by energy and real estate, which both rose 3.1%.

Bond yields declined, with the 10-year Treasury yield dropping by about 12 basis points to 4.668%. That comes after the benchmark yield topped 5% last month.

Data released Thursday morning showed easing inflation and a slowing labor market, adding to investor confidence that the Federal Reserve could be done raising rates. Labor costs unexpectedly dropped in the third quarter, the Labor Department said Thursday. And weekly jobless claims ticked higher to 217,000.

The Fed on Wednesday kept interest rates unchanged for a second straight time, unleashing a rally in the Dow of more than 200 points. The S&P 500 and Nasdaq Composite each ended up more than 1%.

“This is a bounce off of a few very bad months in the equity market, a really massive sell off in fixed income. The Fed meeting is behind us. We can now look forward to some of the economic data and see if that confirms the Fed can stay on hold indefinitely,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. 

To be sure, Horneman is concerned investors may be overly optimistic as Chair Jerome Powell on Wednesday noted he would not rule out a rate increase at the December meeting.

“I think that there still is volatility we’ll see in inflation,” Horneman said. “The one thing that concerns us is that inflation is extremely easy to reignite.”