NEW YORK (AP) — U.S. stocks are steadying themselves on Tuesday as falling oil prices release some of the pressure that’s built up on the market.
The S&P 500 was 0.8% higher in afternoon trading and clawing back most of its loss from the day before. The Dow Jones Industrial Average was up 68 points, or 0.2%, and likewise nearing its record set last week, while the Nasdaq composite was 1.1% higher, as of 2:09 p.m. Eastern time.
Wall Street held firm even though stock markets around the world sank following scary swings in China, as euphoria about possible stimulus for the world’s second-largest economy gave way to disappointment. Stocks tumbled 9.4% in Hong Kong for their worst day since the 2008 global financial crisis.
Helping to support Wall Street was a sharp drawdown in oil prices. They gave back some of the big recent gains they made on worries that worsening tensions in the Middle East could ultimately lead to disruptions in the flow of oil.
A barrel of Brent crude, the international standard, fell 4.1% to $77.66. A barrel of benchmark U.S. crude, meanwhile, eased 4% to $74.08.
Pressure coming from the bond market on the stock market also leveled off a bit. Treasury yields were holding steadier, a day after they shot to their highest levels since the summer.
The 10-year Treasury yield held at 4.03%, where it stood late Monday. The two-year yield, which more closely tracks expectations for what the Federal Reserve will do with overnight interest rates, edged down to 3.96% from 3.99%, late Monday, though it’s still near its highest level since August.
When Treasurys are paying higher yields, investors generally become less willing to pay very high prices for stocks and other investments. And Treasury yields have been storming higher over the last week following a suite of reports showing the U.S. economy may be healthier than expected.
Such reports, including one last week showing much stronger hiring by U.S. employers than forecast, raise hopes that the economy will avoid a recession. But they also force traders to ratchet back expectations for how much the Federal Reserve will cut interest rates by, now that it has widened its focus to include keeping the economy humming instead of just fighting high inflation.
Traders have abandoned expectations for the Fed to cut its main interest rate by a larger-than-usual half of a percentage point at its next meeting, for example. Instead, they’re largely betting on a traditional-sized cut of a quarter of a percentage point, according to data from CME Group. Some are even betting on a small possibility the Fed could keep its main rate steady in November.
On Wall Street, PepsiCo rose 1.5% after delivering stronger profit for the latest quarter than analysts expected, though its revenue fell short.
CEO Ramon Laguarta also said the company now expects a “low single-digit” increase in an important measure of revenue for the year after it had earlier forecast growth of about 4%. U.S. consumers continue to pull back on buying snacks and drinks after years of price increases.
DocuSign jumped 3.6% after S&P Dow Jones Indices said the electronic document signing company would join its S&P MidCap 400 index. DocuSign will replace MDU Resources, which will be bumped down to the S&P SmallCap 600 after announcing last week that it was spinning off its construction services subsidiary, Everus Construction Group.
On the losing end of Wall Street were oil-and-gas companies, which gave back some of their big recent gains driven by the jump in crude prices. Chevron fell 1.7% and was one of the bigger reasons the Dow was lagging other indexes.
In stock markets abroad, trading in mainland China reopened following a national holiday. Before, indexes in Shanghai and Shenzhen had surged on hopes for stimulus from the government and the central bank meant to prop up the economy’s flagging growth.
On Tuesday, China’s economic planning agency outlined details of measures aimed at boosting the economy, but it refrained from major spending initiatives. That helped lead to the 9.4% drop for the Hang Seng index in Hong Kong.
In Shanghai, where the market had been closed as Hong Kong ran higher over the last week, stocks rose 4.6% following their reopening.
The disappointment in China had worldwide effects, knocking down stocks of companies in Europe, the United States and elsewhere that do lots of business in and around China. Estee Lauder fell 2.1%, for example, while Wynn Resorts lost 2.4%.
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AP Business Writers Matt Ott, Elaine Kurtenbach and Zen Soo contributed.
Read More: Wall Street holds firmer after Hong Kong stocks fall to worst day since 2008