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Stocks and bond yields were meandering Thursday afternoon as investors tuned in to a Senate hearing for Treasury secretary nominee Scott Bessent for clues about the policy priorities of the incoming Trump administration.
Standouts, however, in stocks were the S&P 500’s rate-sensitive utilities and real-estate sectors, which were up 2.1% and 1.5%, respectively, according to FactSet. The broader S&P 500 was up less than 0.1%.
The sharp rise in longer Treasury yields since November pulled both sectors lower. But they were getting a nice bounce as the 10-year yield pulled back to about 4.6% from a high of 4.8% earlier in the week.
Technology stocks were acting as a drag on the stock market on Thursday with shares of Meta Platforms and Google-parent Alphabet among the top stocks weighing on the S&P 500, according to FactSet data.
The S&P 500’s tech sector was down 0.3% and its communications-services component was 0.4% lower, while the broader equity index was up 0.1%, according to FactSet.
This comes despite 10-year Treasury yields, which have spiked since November, easing back about 4 basis points on Thursday, near 4.61%, They hit a high of about 4.8% earlier in the week.
Higher bond yields can be particularly problematic for high-growth stocks because they make lofty valuations tougher to justify.
Goldman Sachs Group Inc.’s stock was up 1.3% to $614 a share on Thursday, a record stock price for the investment bank, a day after its stronger-than-expected fourth-quarter profit.
If the gains hold through the session, it’ll be the first record close for Goldman Sachs stock since Nov. 29, when it ended the session at $608.57 a share, according to Dow Jones Market Data.
The stock has risen for four days in a row for its longest winning streak since Dec. 24, when it rose for four straight trading days
David Fanger, senior vice president at Moody’s Ratings, said Goldman’s results were boosted by a “strong operating environment, positive operating leverage and the absence of impairments and non-recurring charges which weakened last year’s results.”
On Thursday, Goldman beat EPS expectations by a wide margin, with Q4 results of $11.95 a share that were well ahead of the analyst estimate of $8.21 a share, according to FactSet data.
“We are very pleased with our strong results for the quarter and the year,” Chief Executive David Solomon said in a statement.
Investors should brace more volatility in Treasury yields with Monday’s inauguration of President-elect Donald Trump, said George Catrambone, head of fixed of income Americas at DWS.
“Watch the inauguration,” Catrambone said, because history shows markets have been prone to react strongly to comments from Trump, whether taken “seriously or literally.”
While it may be possible that 10-year Treasury yields already peaked around 4.8%, he expects “term premiums,” or the extra compensation investors demand to lend longer-term to the U.S. government, to remain elevated until a clearer picture of Trump’s policy agenda emerges.
Shares of an exchange-traded fund that holds Big Tech stocks was falling Thursday, as Tesla Inc. and Apple Inc. posted sharp losses in late morning trade.
The Roundhill Magnificent Seven ETF was down 0.9% as its holdings were most hurt by Tesla dropping 3% and Apple falling 2.6%, according to FactSet data, at last check.
The ETF portfolio of seven stocks includes Facebook parent Meta Platforms Inc. and Google parent Alphabet Inc., both of which were down Thursday morning, while gains from Nvidia Corp., Amazon.com Inc. and Microsoft Corp. weren’t enough to bring the ETF into positive territory.
Big Tech stocks have outsized weighting in the S&P 500, which was trading up slightly late morning Thursday, according to FactSet data, at last check. The Roundhill Magnificent Seven ETF equally weights the stocks in its portfolio.
Natural-gas prices edged a bit lower in Thursday dealings after initially finding support from the hefty weekly drop in U.S. supplies of the fuel reported by the Energy Information Administration.
The EIA reported that domestic natural-gas supplies declined by 258 billion cubic feet for the week that ended Jan. 10. Analysts surveyed by S&P Global Commodity Insights expected a fall of 251 bcf, on average.
“It doesn’t appear that weather forecasters are backing off their predictions of a major Arctic cold blast,” said Phil Flynn, senior market analyst at the Price Futures Group. If the Arctic winter weather extends into February, he added, “it will be a game changer for not only oil but natural gas.”
In a note Thursday, strategists at Morgan Stanley raised their 2025 forecast for natural-gas prices at Henry Hub, the U.S. pricing hub for the fuel, to $4.15 per million British thermal units, from $3.75 million Btus. Natural gas for February delivery had settled Wednesday at $4.083, the highest since January 2023, according to Dow Jones Market Data, though prices have eased back to $4.072 in Thursday dealings.
The S&P 500 turned positive in late morning trade on hopes that more rate cuts from the Federal Reserve might still on the table for 2025.
Fed governor Christopher Waller said he sees potential for up to four more cuts this year, in an interview with CNBC.
The S&P 500 was up about 0.2% at last check, while the Nasdaq was 0.2% higher and the Dow was off less than 0.1%, according to FactSet.
Traders also were bracing late in the session for a senate confirmation hearing for Scott Bessent, President-elect Donald Trump’s nominee to head the Treasury Department, with a hope of getting an early read on the administration’s tax, tariff and immigration policy goals.
Fed-funds futures traders inched closer to an almost 50% chance that the Federal Reserve will cut its benchmark interest rate by May, after Fed governor Christopher Waller told CNBC he sees a possibility of three to four reductions this year.
The chance of a rate cut of at least a quarter point shifted to 49.8% as of Thursday, up from 46.6% a day ago, according to the CME FedWatch Tool. Meanwhile, traders saw a 50.2% chance of no action by May, which would keep the fed-funds rate target at between 4.25% and 4.5%.
After Waller’s interview, yields on everything from the 1-month Treasury bill to the 10-year government note turned slightly lower.
Semiconductor stocks are the biggest S&P 500 gainers in Thursday trading, fueled by upbeat commentary from Taiwan Semiconductor Manufacturing Co. on the state of the artificial-intelligence market.
Chip-equipment stocks KLA Corp., Lam Research Corp. and Applied Materials Inc. are the top three performers in the S&P 500 early Thursday, each up more than 4%. Broadcom Inc.’s stock ranks fifth with a 3.5% gain.
TSMC’s capital-spending outlook was “clearly a bullish indicator” for chip-equipment stocks, according to Evercore ISI analyst C.J. Muse, who also flagged the company’s projection of strong AI demand.
U.S. stocks erased a modest early gain, with the S&P 500 struggling to tally a fourth-straight advance.
The index was marginally lower in recent trading, although it was outperforming both the Nasdaq Composite and the Dow.
Weakness in UnitedHealth Group and McDonald’s Corp. shares were weighing on the Dow. Meanwhile, a drop of more than 2% in shares of Tesla Inc. appeared to be the biggest headwind for the S&P 500 and Nasdaq.
Elsewhere, bank stocks were mixed. Shares of Morgan Stanley climbed after its earnings report, while investors in PNC Financial and U.S. Bancorp weren’t so lucky. Here is where stocks stood in recent trade:
The S&P 500 was down 7 points, or 0.1% at 5,943.
The Nasdaq Composite was down 45 points, or 0.2%, at 19,463.
The Dow was off by 79 points, or 0.2%, at 43,141.
