S&P 500 is little changed as traders weigh rising yields against optimism over Strait of Hormuz reopening: Live updates

Treasury yields climbed to multidecade highs Thursday as traders priced in additional Federal Reserve rate hikes, pushing the Dow Jones Industrial Average down for a third consecutive session. The 30-stock index extended losses as elevated yields pressured cyclical sectors most sensitive to borrowing costs.

The move higher in rates came despite positive geopolitical developments, with market participants weighing reopening optimism around the Strait of Hormuz trade route against hawkish Fed expectations. The benchmark index struggled to find direction as the competing forces offset each other, leaving broader equity markets little changed.

Rising Treasury yields typically compress equity valuations by making fixed-income alternatives more attractive and increasing the discount rate applied to future corporate earnings. The sustained yield climb signals traders are abandoning bets on near-term rate cuts and instead positioning for a higher-for-longer rate environment.