US stocks rose after midday on Monday, with consumer discretionary and energy leading the charge, as government bond yields jumped alongside crude oil futures.
The Dow Jones Industrial Average climbed 0.2% to 31,362.8, with the S&P 500 up 0.5% to 3,883.7 and the Nasdaq Composite 1.1% higher at 11,580.3.
Healthcare and utilities were among the steepest decliners, implying defensive areas of the market lagged.
West Texas Intermediate futures surged 4.2% to $101.68 a barrel.
A “relief rally” in Q3 could boost the S&P 500 to as high as 4,200, a gain of about 8.7% from current levels, Stifel said in a research note on Sunday. The brokerage recommends a switch from defensive to overweight cyclical growth areas such as software, semiconductors, media and entertainment, technology hardware, and retail.
The dollar index fell 0.8% to 107.22, retreating from its highest level scaled last week in about two decades.
The probability the Federal Reserve will lift its target rate by 100 basis points to the 2.5% to 2.75% target range stood at more than 33% as of Monday afternoon, according to the CME Group’s FedWatch Tool. That probability was over 80% on Wednesday last week.
The US 10-year yield jumped 6.3 basis points to 2.99% intraday and the two-year yield rose 3.5 basis points to 3.17%. The two-year rate remains above its 10-year counterpart, implying the yield curve between the two maturities remains inverted, a bearish signal from the bond market.
In company news, Goldman Sachs’ (GS) second-quarter results beat expectations as declines in investment banking and asset management revenue weren’t as bad as analysts predicted. Shares climbed 1.9% intraday.
Bank of America (BAC) reported lower second-quarter earnings that missed estimates as investment banking fees fell 47% amid “weaker industry-wide underwriting activity” in the year. Shares were up 0.1% intraday.
The National Association of Home Builders’ monthly housing market index fell to a reading of 55 in July from 67 in June, well below expectations for a reading of 65 in a survey compiled by Bloomberg.
Gold was up 1.2% to $1,722.50 per troy ounce, and silver was up 1.3% to $19.20 per ounce.
