The US Treasury yield fell to two-week lows on Thursday, while copper was at 16 month lows as investors worried about a possible global economic slowdown.
The Nasdaq went up more than 1.6% on Wall Street. Technology shares, including Apple Inc. and defensive shares, gave the S&P 500 its biggest boost as investors worried about a possible recession.
The risk of interest rate rises tipping economies into a recession has been weighed by investors.
Federal Reserve Chairman Jerome Powell testified before Congress for the second day, a day after he said the Fed is committed to cutting inflation at all costs, and acknowledged that a recession was certainly a possibility. Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said that the stock market is trying to keep pace with the Fed's tightening and trying to put in a low in a bear market.
He said that the yields are coming down, and that's helping stocks. The market probably discounted a mild recession for now. The US, Britain, the euro zone and the US reported the first outright decline in new orders in the last two years, as the gauges of factory activity softened in June.
China's COVID 19 curbs and Russia's invasion of Ukraine have disrupted supply chains and added to inflation problems, which is why manufacturing growth is slowing worldwide.
The Dow Jones Industrial Average rose 194.23 points, or 0.64%, to 30,677. The S&P 500 gained 35.84 points, or 0.95%, to 3,795. 73 and the Nasdaq Composite added 179.11 points, or 1.62%, to 11,232. The pan-European STOXX 600 index lost 0.82% and the MSCI's gauge of stocks gained 0.43%.
In the US bond market, yields fell, due to a growing belief that yields may have topped for the near term even if inflation stays high.
The Fed meeting last week, when the US central bank hiked rates by 75 basis points, was the biggest increase since 1994, as yields dropped from their highest level in more than a decade.
The US 10-year yield fell to 3.005% before rebounding to 3.070%. They have dropped from 3.498% on June 14, the highest since April 2011.
There were worries about demand and rising interest rates and weak economic data that led to a slump in copper prices.
The London Metal Exchange LME hit its lowest level since February 2021, reaching its lowest level since February 2021.
In the foreign exchange market, the euro fell across the board after the weaker than expected German and French PMI data.
The euro fell by 0.5% against the dollar to $1.0509. It fell below the $1.05 level for the third time this week. The euro fell by 1.4% against the Japanese currency to 141.85 yen.
Oil prices fell as investors weighed the risks of a recession. Brent crude futures fell $1.69 to settle at $110.05 a barrel, while US West Texas Intermediate WTI crude futures dropped $1.92 to settle at $104.27.