From Kiplinger · · 2m
Dow Rises 478 Points Under Rate Pressure
Stock markets gain ground as Middle East tensions ease, but bond yields and inflation concerns loom.
In brief
Stock markets gain ground as Middle East tensions ease, but bond yields and inflation concerns loom. Markets rallied on geopolitical relief, but rising Treasury yields and weakening consumer sentiment signal headwinds ahead. Originally reported by Kiplinger.
Markets rally on Middle East relief
The Dow rose 478 points as Iran proposed a seven-day plan to end hostilities and reopen the Strait of Hormuz. Oil prices fell 2.5% on the news, easing inflation concerns.
Dow ends three-week losing streak
The Dow Jones Industrial Average closed up 0.9% to 51,828, snapping a three-week decline. The S&P 500 added 0.5% and the Nasdaq Composite rose 0.5%.
Treasury yields hit 52-week highs
The 10-year Treasury yield reached 5.156% and the 30-year hit 5.485%, both 52-week highs. Rising bond yields remain a broad concern heading into October.
Consumer sentiment hits nine-month low
The University of Michigan Consumer Sentiment Index fell to 48.1 in September from 51.7 in August, the lowest reading since May. Concerns over high prices continue to climb.
“Views of current and year-ahead expected personal finances both weakened about 10% this month.”
Inflation expectations surge to 4.6%
Year-ahead inflation expectations rose to 4.6% in September from 4.0% in August, the highest level since June. This substantially exceeds the 3.4% seen in February before the Iran conflict began.
Akamai lands $11.6 billion Anthropic deal
Akamai Technologies signed a seven-year, $11.6 billion contract to provide computing power to AI model leader Anthropic, with an option to add another $9 billion. The stock soared on the announcement.
Guggenheim raises Akamai price target
Analyst John DiFucci raised his 12-month price target on Akamai from $190 to $225, citing the Anthropic deal's base annual recurring revenue as more than five times the company's 2025 cloud infrastructure revenue.
MGM pursues People Inc. acquisition
MGM Resorts is considering a bid to buy People Inc., an unusual reversal after People withdrew its own offer to buy MGM. People holds a 27% stake in MGM valued at $2.5 billion.
MGM stock gives back all gains
MGM declined 11% on Thursday, erasing all paper gains since People's $48.30 per share offer was announced on June 1. Wall Street questions whether the market is recognizing value in People's holdings.
The key point
Markets rallied on geopolitical relief, but rising Treasury yields and weakening consumer sentiment signal headwinds ahead.
