US equities recovered from early losses on Thursday as a reversal in the global bond selloff helped ease pressure on risk assets. The rebound came after the US 10-year Treasury yield briefly climbed to its highest level since 2002, intensifying concerns that persistent inflation and resilient economic activity could keep interest rates elevated for longer.

Stocks Recover as Treasury Yields Pull Back

The S&P 500 rose 0.2% to recover from a two-week low, while the Dow Jones Industrial Average gained 0.04% and the Nasdaq Composite advanced 0.04%. The modest gains reflected a market still balancing supportive corporate developments against a difficult interest-rate environment.

Earlier in the session, equities came under pressure as economic data continued to point toward a relatively solid US economy accompanied by persistent price pressures. That combination has become increasingly important for markets because stronger activity can give the Federal Reserve less room to ease policy if inflation remains above its desired level.

Bond Market Volatility Remains a Key Equity Risk

The retreat in Treasury yields provided an immediate relief valve for stocks. Government bond yields influence the discount rates used to value equities, meaning a rapid increase in long-term yields can place pressure on stock valuations even when corporate earnings remain resilient.

The latest reversal therefore helped stabilize sentiment after the bond market had experienced a broader selloff. However, the 10-year Treasury yield’s move to a multi-decade high underscores the continuing sensitivity of equities to inflation expectations, fiscal concerns and the future path of US monetary policy.

Corporate Developments Provide Additional Support

Company-specific developments also contributed to the more constructive tone. Constellation Energy shares rose after the company signed a 20-year power agreement with Amazon, highlighting the growing importance of reliable electricity supply as large technology companies expand data-center infrastructure.

Accenture shares also reached a seven-and-a-half-month intraday high. The move provided another example of investors responding to company-specific factors even as broader markets remained focused on interest rates and economic data.

What the Market Is Watching Next

The session demonstrated how quickly sentiment can shift when Treasury yields move sharply in either direction. For global investors, the relationship between US bond yields and equity valuations remains particularly significant because changes in US financing costs can influence capital flows, currencies and risk appetite across international markets, including Israel.

Going forward, markets will continue to assess whether economic resilience is accompanied by further progress on inflation. A sustained decline in Treasury yields could reduce some pressure on equities, while another acceleration in yields could revive valuation concerns. Corporate earnings, inflation data and Federal Reserve policy signals will therefore remain central to determining whether Thursday’s rebound develops into a broader stabilization or remains a short-term response to bond-market volatility.