(Updates with index/price moves, macroeconomic data and company/geopolitical news from the first paragraph.)
US equity indexes were mixed as surging government bond yields continued to dampen risk appetite following stronger macroeconomic data, higher oil prices, and hawkish commentary from top Federal Reserve officials.
The Dow Jones Industrial Average fell 0.3% to 51,349.98 on Thursday. The Nasdaq Composite and the S&P 500 were little changed at 26,939.37 and 7,704.13, respectively. Communication services topped the gainers, while materials and utilities led decliners.
President Donald Trump and his Chinese counterpart Xi Jinping met at the White House in Washington, DC. Xi told Trump he supported a memorandum of understanding that the US had signed with Iran and the end of naval blockades, Middle Eastern broadcaster Al Jazeera reported, citing Chinese state media. Meanwhile, crude oil extended gains amid little evidence of the US and Iran progressing toward a diplomatic solution to the Middle East conflict.
The front-month US West Texas Intermediate crude oil contract climbed 3% to $94.95 per barrel, and the global benchmark North Sea Brent advanced 4% to $107.24 per barrel.
Initial jobless claims fell to 197,000 in the week ended Sept. 19 from an upwardly revised 198,000, compared with expectations for an increase to 200,000 in a Bloomberg-compiled poll. The four-week moving average declined by 1,750 to 202,250.
New-home sales rose to an annual rate of 684,000 in August from an upwardly revised 643,000 in July, above the 616,000 expected in a survey compiled by Bloomberg. The Kansas City Fed monthly manufacturing index rose to 14 in September from 10 in August, compared with expectations of 9 in a Bloomberg-compiled poll.
US Treasury yields jumped across the term structure as higher oil prices and the Iran war continued to fuel inflation concerns. The 10-year yield soared 9.4 basis points to 5.21%, the highest since 2007, and the 30-year rate surged 8.8 basis points to 5.49%, the strongest level since 2004.
The rally in yields reflects several "longstanding issues, including dangerously high levels of inflation for years, a massive expansion of the government's balance sheet with total debt now surpassing $40 [trillion], and sizable corporate issuance offering direct competition for US Treasury bonds," Stifel Securities said in a note.
"Some modest further tightening may be warranted" to bring inflation down to the Federal Reserve's 2% target, Philadelphia Fed President Anna Paulson said Thursday. Speaking at the London Macro Policy Forum, New York Fed President John Williams said the same day that it would be "reasonable" to expect another Fed interest rate hike by the end of the year, CNBC reported.
Gold futures fell 0.8% to $4,285.5, and silver futures declined 2.1% to $63.63.
The Federal Reserve could raise interest rates as early as October. The probability of a back-to-back 25-basis-point increase next month stood at 70% as of Thursday, up from 11% a month ago, according to the FedWatch tool.
Oracle (ORCL) issued a force majeure notice to Project Jupiter's developer, a unit of Blue Owl Capital (OWL), seeking to defer payments if its planned New Mexico data center is delayed and fails to come online in 2028 as planned, Bloomberg reported Thursday, citing people familiar with the matter. Oracle shares dropped 3.5%.
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