US Stocks Gain While Bond Market Remains Volatile

Equities bounce back as corporate earnings surprise to the upside and business activity shows renewed strength—but bond yields continue to unsettle investors.

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Equities Rebound Amid Earnings Strength

On August 24, U.S. stock indices staged a solid recovery following a difficult week. The S&P 500, Dow Jones Industrial Average, and Nasdaq all posted gains, reversing part of the prior losses. This rebound followed a spate of earnings reports that broadly exceeded expectations, particularly among large-cap and technology firms. Analysts cited robust profit margins and optimistic forward guidance as key drivers behind investor confidence.

Business Activity Surges to Multi‑Year High

A pivotal catalyst was fresh data from S&P Global’s Flash PMI, released August 21, showing U.S. business activity accelerating to its fastest pace since April 2022. The composite output index rose to 56.0 in August, up from 54.5 in July, driven by a services-sector revival even as manufacturing growth softened . Firms added staff at the fastest rate since early 2025, with business optimism climbing to the highest level in nine months . Goldman Sachs now forecasts 2.1% GDP growth for 2026, citing strong business investment and equity momentum .