Nasdaq 100 and S&P500: Alphabet and Tesla Surge Lifts US Indices as Yields Retreat

Stocks Rebound as Treasury Yields Ease from Recent Highs

U.S. equities saw a modest recovery Thursday as Treasury yields retreated from recent peaks, calming investor concerns around rising rates and swelling fiscal deficits. The Dow Jones Industrial Average rose 90 points, or 0.2%, while the S&P 500 also gained 0.2%. The tech-heavy Nasdaq outperformed with a 0.7% advance, fueled by strength in large-cap tech stocks.

Alphabet jumped 3%, while Nvidia and Microsoft added about 1% each. Tesla rose over 2%, helping to offset concerns following Wednesday’s sharp selloff when the Dow lost over 800 points. The rebound came as the 30-year Treasury yield slipped slightly after climbing to 5.1%, its highest since October 2023.

Is Washington Fueling Rate Pressures with Deficit Risk?

A new bill passed by the House on Thursday is stoking deficit fears, which helped push Treasury yields higher this week. The legislation, which includes tax cuts and increased military spending, could add nearly $4 trillion to the national debt, according to the Congressional Budget Office. Investors are wary that such spending may erode demand for U.S. Treasuries, requiring higher yields to attract buyers.

While the bill is expected to temporarily boost GDP growth by stimulating demand through lower taxes and government spending, longer-term concerns persist. “Yields are going higher, which means prices are going down,” said Jed Ellerbroek of Argent Capital Management. “Treasuries are becoming incrementally less appealing as the budget deficit shows no sign of normalizing.”

How Did Economic Data Shape Market Sentiment?

S&P Global’s May flash PMIs showed better-than-expected rebounds in both manufacturing and services activity, with readings of 52.3 each—above the 50 mark that signals expansion. New orders surged, particularly in manufacturing, which hit a 15-month high. But pricing pressures resurfaced. Tariffs drove the sharpest rise in input costs since August 2022, reigniting inflation concerns.

Despite these inflationary signals, the economic growth momentum appeared intact, and sentiment improved slightly as President Trump pulled back from the most extreme tariff threats.

Which Stocks Are Feeling the Pressure?

While major indexes stabilized, pockets of weakness remained. Ten S&P 500 stocks hit new 52-week lows, with defensive names like Conagra, Campbell Soup, and General Mills underperforming. REITs and utilities also faced pressure. In contrast, GE Vernova hit all-time highs, bucking the downtrend and highlighting investor interest in select growth plays.

What’s Next for Markets?

Traders will stay focused on upcoming Treasury auctions and how the Senate handles the tax-and-spending bill, which could reshape expectations for long-term rates. If the bill advances, concerns around deficit financing may deepen, pushing yields higher and adding pressure to equities.

Attention will also remain on inflation signals tied to newly imposed tariffs. With Thursday’s PMI data showing the fastest price increases since August 2022, largely driven by those tariffs, investors will be closely watching for any further response from the Federal Reserve. Rate expectations could shift quickly if inflation pressures accelerate.

More Information in our Economic Calendar.