Stock market today: Wall Street drifts after 10-year yield nears 5% and oil prices ease back

NEW YORK (AP) — Wall Street isn’t moving much Thursday, but a swirl of competing forces are pushing and pulling on both the stock and bond markets under the seemingly calm surface.

The S&P 500 was virtually unchanged in early trading following a mixed set of profit reports and forecasts from

Tesla

and other influential stocks. The Dow Jones Industrial Average was up 42 points, or 0.1%, as of 9:45 a.m. Eastern time, and the Nasdaq composite was flat.

The bond market was also shifting back and forth. Rising yields there have been the main force pushing stocks lower in recent months, and the yield on the 10-year Treasury ticked up to 4.93% from 4.91% late Wednesday. Earlier in the morning, though, it jumped above 4.98% to touch its highest level since 2007.

Crude oil prices, meanwhile, gave back some of their big jump from a day before, which was launched by worries that

war in the Middle East

could lead to disruptions of supplies.

With so many moving parts, much of the focus has been on Treasurys, which act as the reference point for most financial markets. The 10-year yield has been on a mostly steady march from less than 3.50% during the spring as a resilient U.S. economy forces investors to accept a new normal where the Federal Reserve likely keeps its main interest rate high for a long time.

The Fed is trying to push inflation lower, and high rates do that by dragging on investment prices, corporate profits and the overall economy. A new climate of high rates would be a harsh change for a generation of investors on Wall Street who have enjoyed mostly very low rates.

Another report came Thursday to show the U.S. job market remains remarkably solid, even though the Fed has already pulled its main rate to the highest level since 2001. Fewer U.S. workers applied for

unemployment benefits

last week than expected, which indicates low levels of layoffs across the country.

While that’s good for an economy that has defied predictions of a recession for more than a year, it could also give inflation more fuel.

A separate report, though, said manufacturing in the mid-Atlantic region is weakening by more than economists expected. Manufacturing has been one part of the economy that’s been particularly hard hit by high interest rates.

What happens next with interest rates and the value of the U.S. dollar will depend on whether the U.S. economy can indeed pull off what’s called a “soft landing,” where growth slows enough to snuff out inflation but not so much that it causes a bad recession. It will also depend on how sticky inflation is following that landing, according to Athanasios Vamvakidis, foreign-exchange strategist at Bank of America.

Vamvakidis wrote in a BofA Global Research report that he sees risks of yields and the dollar remaining high after the landing, even if they’re both lower than current levels.

High yields hurt all kinds of stocks, but they hit particularly hard on those bid up for big growth expected far in the future or those seen as very expensive. That’s often put the spotlight on Big Tech recently, and some reported a mixed set of profits.

Tesla fell 7% after it reported weaker results for the summer than analysts expected. It’s been cutting prices to drive sale, but that also eats into its profitability.

On the opposite end was

Netflix

, which jumped 14.7%. It reported stronger profit for the latest quarter than analysts expected, and it said it would raise prices on some of its membership levels to drive more revenue.

Overall, analysts expect companies across the S&P 500 index to report

slight growth

in their earnings per share for the summer versus a year earlier. If they do, it would be the first such growth in a year.

In the oil market, a barrel of benchmark U.S. crude fell 0.4% to $86.89. Brent crude, the international standard, fell 1.4% to $90.26. A day earlier, both jumped at least $1.60 on worries that the latest Hamas-Israel war could draw in Iran, Saudi Arabia or other big oil-producing countries.

In stock markets abroad, indexes fell across Europe after slumping more sharply across Asia.

——

AP Business Writers Matt Ott and Elaine Kurtenbach contributed.