Wall Street points toward gains as oil prices fall and bond yields ease

The yield on the 10-year Treasury eased overnight to 4.64% from 4.66% late Tuesday, but are up from less than 4% before the war with Iran began. That’s a notable increase and part of the reason that stock prices look even more expensive while threatening to slow the economy.

Higher yields can drive up rates for mortgages and loans going to companies to build AI data centers, which has been a big source of growth for the economy.

There was also some relief from higher energy prices, which can hamper growth as well.

Early Wednesday, U.S. benchmark crude oil fell $2.65 to $101.50 per barrel. Brent crude, the international standard, lost $2.89 to $108.39 per barrel. But gasoline prices in the U.S. continued to rise.

The average price for a gallon of gasoline rose 3 cents overnight to $4.56, according to the AAA motor club, or about 43% more than it cost last year at this time.

In equities trading, Target rose 2% after the Minneapolis retailer reported a jump in first quarter sales and raised its annual revenue outlook.

Target, which embarked on a turnaround plan under its new CEO earlier this year, said it expects the momentum to continue through 2026.

Attention Wednesday will be focused on Nvidia’s quarterly results due after the closing bell. The chip company has routinely blown past analysts’ expectations each quarter and provided forecasts for future growth that have consistently topped Wall Street’s.

How it does could determine whether technology stocks and the larger U.S. stock market can maintain their rally. Nvidia fell 0.8% Tuesday and was one of the heaviest weights on the S&P 500 because of its immense size. Its shares were up 1.8% in premarket trading Wednesday.

Many big U.S. companies have been reporting stronger-than-expected profits for the latest quarter thanks in part to their customers continuing to spend despite high gasoline prices and other challenges. That’s helped vault U.S. stock indexes to records, but disquiet in the bond market is threatening that.

At midday in Europe, Germany's DAX rose 0.5%, while the CAC 40 in Paris was up 0.6%. Britain's FTSE 100 was effectively unchanged.

In Japan, the Nikkei 225 lost 1.2% to 59,804.41.

The yield on the 10-year Japanese government bond slipped to just below 2.8% but remained at its highest level since 1997.

Chinese shares also fell, with Hong Kong's Hang Seng losing 0.6% to 25,656.12. The Shanghai Composite index shed 0.3% to 4,162.10.

Australia's S&P/ASX 200 dropped 1.3% to 8,496.60.

In South Korea, the Kospi dropped 0.9% to 7,208.95 after a broad sell-off a day earlier. Taiwan's Taiex gave up 0.4%.