Treasury Yields Rise Again, but Dow Gains 1% as US Stocks Rebound

All three major Wall Street indexes close higher

Strong services data and dip buying support sentiment

Bitcoin surges 22% in a week

U.S. stocks rebounded after one session of losses even as long-term Treasury yields kept rising. Sentiment improved as investors bought into the recent pullback and fresh data showed the U.S. services sector remained in solid expansion.

On August 21, the Dow Jones Industrial Average rose 517.80 points, or 0.98%, to 53,277.01. The S&P 500 gained 33.21 points, or 0.43%, to 7,674.37, while the Nasdaq Composite added 113.29 points, or 0.44%, to 26,180.46.

The bounce followed a broad selloff in the three major indexes a day earlier, which drew in dip buyers. Even so, caution persisted early in the session as Treasury yields resumed their climb.

Treasury Secretary Scott Bessent signaled a day earlier that the Treasury could expand bond buybacks. Concerns about the fiscal deficit and inflation, however, remained in place. The 30-year Treasury yield rose 1 basis point to 5.28%, while the benchmark 10-year yield climbed 3 basis points to 4.73%.

Equities were supported by U.S. services-sector data. S&P Global's preliminary August services PMI business activity index rose 2.2 points from the prior month to 56.8. That was the biggest monthly increase in 20 months and indicated the sector remained in expansion.

Despite the rebound, the major indexes all posted weekly declines. The S&P 500 fell 1.4% for the week, the Nasdaq dropped 2.1%, and the Dow lost 0.8%.

Oil rose for a sixth straight session on concern that Middle East tensions could disrupt supply. Worries about tighter crude supply grew after the U.S. warned it would impose economic sanctions on countries trading with Iran. For the week, October Brent crude futures rose 6.63%, while West Texas Intermediate gained 6.86%.

The dollar weakened slightly. The dollar index, which measures the U.S. currency against six major peers, slipped 0.05% to 98.83. As the dollar eased, money flowed into alternative assets including cryptocurrencies and gold. Bitcoin traded near $77,000, approaching the $80,000 level, and has gained about 22% over the past week.

Crypto-related stocks also rallied. Coinbase climbed 8.2% and Robinhood surged 14%. Spot gold also rose 2.2% to $4,615.65 an ounce.

Investors are now looking ahead to major economic and corporate events next week. The Federal Reserve's Jackson Hole policy symposium is scheduled, and Chair Kevin Warsh is set to speak. The July personal consumption expenditures price index is also due, along with earnings from Nvidia and other major technology companies.

Hong Min-seong, Hankyung.com reporter mshong@hankyung.com