Oil prices climbed on Thursday, Treasury yields moved back up and Walmart’s sharp drop helped drag the U.S. stock market lower, undoing some of the relief that followed a Treasury Department move a day earlier. The S&P 500 slipped 0.3% and was on track for a fourth loss in five days since setting its all-time high last week.
The Dow Jones Industrial Average was down 344 points, or 0.6%, at 11:30 a.m. Eastern time, and the Nasdaq composite was 0.8% lower. Brent crude rose 1.9% to $93.35 a barrel, while the 10-year Treasury yield climbed to 4.70% from 4.65% late Wednesday. That put pressure back on borrowing costs just after Treasury Secretary Scott Bessent had moved to at least double planned purchases of longer-term Treasurys from Sept. 9 through Nov. 4.
The move mattered because buying longer-term Treasurys tends to lift their prices and push yields down. Higher prices and lower yields usually make those bonds look more attractive, while a drop in prices does the opposite. Bessent’s announcement briefly helped yields, but the effect did not last. The 10-year yield had been 4.71% late Tuesday before the Treasury Department’s announcement, after reaching its highest level in more than a year. The 30-year yield had already returned to its 2007 level, before the Great Recession sent yields toward zero around the world.
Debt worries only added to the strain. The U.S. government debt topped $40 trillion on Wednesday, after first passing $39 trillion in April, a climb that underscores how quickly the total has risen. The bond market had already been under pressure through the summer because of high inflation and huge government debt, and Thursday’s jump in oil offered another reason for investors to demand more return for holding Treasurys. Late Wednesday, Donald Trump also threatened Iran with what he called “the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY.”
The stock market also had another reason to wobble: Walmart. Shares fell 9.4% even though the company reported stronger profit and revenue for the latest quarter than analysts expected. Its underlying revenue growth at stores slowed again, and its forecast for profit in the current quarter came in below Wall Street’s expectations. That mattered beyond one retailer. Walmart is one of the clearest gauges of how U.S. shoppers are holding up, and a weak update on sales at U.S. retailers overall last month had already raised worries that households are still under pressure from inflation and a less solid job market.
Fresh economic data on Thursday did little to calm those fears. Fewer U.S. workers applied for unemployment benefits last week than economists expected, and manufacturing in the mid-Atlantic region appeared much stronger than expected. Those reports suggested the economy remains sturdy enough to keep pressure on prices and yields. For now, Bessent’s larger Treasury purchases may limit some of the damage in the bond market, but Thursday’s slide showed how quickly oil, debt worries and stronger data can overpower that support.
