Markets End Mixed as Bond Yields Rise S&P 500 Holds a Three-Week High

US stock indices ended Thursday mixed, although the S&P 500 managed to reach a three-week high. The session was defined by renewed pressure from the bond market, where the 10-year Treasury yield moved to 4.11%, cooling risk appetite across the board. Technically, the market is still searching for equilibrium between strong earnings enthusiasm and growing expectations of tighter monetary policy triggered by macroeconomic data.

The unexpected drop in initial jobless claims to a three-year low became the key catalyst behind rising yields. Markets interpreted this as a sign of labor-market overheating, reinforcing the hawkish stance at the Federal Reserve. Additional pressure came from abroad: reports that the Bank of Japan is preparing to raise rates for the first time in years pushed Japanese bond yields sharply higher, amplifying global selling in sovereign debt.

Despite headwinds from the bond market, corporate stories provided meaningful support to individual stocks. Dollar General surged after raising its sales outlook, Meta rose following plans to cut the metaverse division’s budget, while Hormel and SAIC surprised investors with stronger-than-expected earnings. These isolated boosts helped prevent broader market weakness.

Tech stocks once again faced pressure, with semiconductors leading the decline. Intel dropped more than seven percent, becoming the biggest loser in major indices. The entire subsector appeared vulnerable in an environment of rising yields and rotation away from growth stocks. Additional declines in ON Semiconductor, Micron, ASML and others only reinforced the negative tone.

Investors are watching upcoming releases closely, including personal income and spending data and the core PCE index — the Fed’s most important inflation gauge. Any upside surprise could strengthen the case for tighter policy and push yields even higher. Yet markets still price in a high probability of another rate cut at the December 9–10 FOMC meeting, creating a fragile balance between expectations and reality.

European equities managed to gain, with the Stoxx 50 reaching a two-and-a-half-week high. Asian markets were split, though Japan’s Nikkei stood out with strong gains as investors responded to policy normalization signals. China remained subdued, reflecting persistent weakness in domestic demand.

US Treasuries could not withstand global yield momentum. Inflation expectations rose as the 10-year breakeven rate reached a two-week high. In Europe, German yields pushed higher while UK gilts slipped slightly. This divergence underscores the absence of a unified central-bank trajectory in the current cycle.