- US stocks fell on Thursday as interest rates resumed their uptrend and jobless claims jumped.
- The 10-Year US Treasury yield rose to 2.83% after Fed President John Williams said a 50 basis point rate hike in May would be reasonable.
- Meanwhile, bank earnings from Goldman Sachs, Morgan Stanley, and Citigroup beat estimates.
US stocks fell on Thursday as investors digested a resumed uptrend in interest rates and a slight uptick in weekly jobless claims.
The 10-Year US Treasury yield surged 13 basis points to 2.83%, representing its highest level since late 2018. The surge in interest rates came after Fed President John Williams said a 50 basis point interest rate hike in May is a "very reasonable option" given the elevated inflation and strong economy.
Meanwhile, jobless claims jumped 18,000 to 185,000 last week after falling to a 54-year low in the prior week. All-in, the low jobless claims still points to a tight labor market as demand for workers outstrips supply.
Here's where US indexes stood at the 4:00 p.m. ET close on Thursday:
- S&P 500: 4,392.59, down 1.21%
- Dow Jones Industrial Average: 34,451.23, down 0.33% (113.36 points)
- Nasdaq Composite: 13,351.08, down 2.14%
Bank earnings rolled in on Thursday, with Goldman Sachs, Morgan Stanley, and Citigroup all reporting first-quarter earnings results that beat analyst estimates, as a strong consumer and profitable trading divisions was enough to outweigh a near-halt in underwriting activity for IPOs.
Wells Fargo's first-quarter earnings results missed analyst estimates as non-interest revenue plunged 28% from the prior quarter.
Elon Musk made waves on Thursday after he delivered a hostile takeover proposal to Twitter. Musk offered $54.20 per share for all of Twitter's outstanding shares, representing a value of more than $40 billion and a premium of 18% from Wednesday's close.
While Twitter's board of directors reviews the offer, Wedbush analyst Dan Ives thinks a deal will ultimately get done in a "soap opera" fashion. Alternatively, Stifel cut Twitter to "sell" on Thursday, arguing that Musk's offer puts a near-term ceiling on the share price.
Holders of Russian dollar bonds have said they cannot accept rubles, in the latest sign the government is headed for a default. Russia last week transferred rubles to make bond payments, after the US Treasury blocked its attempts to pay in dollars.
West Texas Intermediate crude oil jumped as much as much as 1.88% to $106.21 per barrel. Brent crude, oil's international benchmark, rose as much as 2.15% to $111.12.
Bitcoin fell 3.72% to $39,799. Ether prices fell 3.92% to $2,996.
Gold fell as much as 0.46% to $1,975.50 per ounce. The yield on the 10-year Treasury added 13 basis points to 2.83%.