The major averages recovered from a sharp morning decline to finish little changed on Thursday, as crude oil retreated substantially from its session high and alleviated one of the pressures that weighed on stocks early in the day. The S&P 500 and Nasdaq Composite ended flat, while the DJIA (-0.3%) logged a modest loss. The Russell 2000 (-0.1%) also finished near its flat line, while the S&P Mid Cap 400 declined 0.4%.

The session began on a considerably weaker note as crude oil surged above $96 per barrel and Treasury yields remained at multi-year highs. The combination weighed particularly heavily on growth stocks, sending the Nasdaq firmly lower and producing broad losses across the market. The tone improved considerably after a Reuters report indicated that a potential phased reopening of the Strait of Hormuz is being discussed. Oil quickly backed away from its highs, easing concerns that another sharp increase in energy prices would add to inflation pressures. WTI crude ultimately settled $2.22 higher (+2.4%) at $94.68 per barrel, still well below its intraday peak.

Treasury yields remained another significant headwind, with an attempted recovery in Treasuries ultimately failing amid concerns about additional Fed tightening, elevated government debt levels, and another soft Treasury auction. New York Fed President John Williams (voting FOMC member) said it is reasonable to expect another rate increase this year, while Philadelphia Fed President Anna Paulson (voting FOMC member) said that "some modest further tightening may be warranted" if conditions evolve as she expects.

The continued pressure on Treasuries made the recovery in technology and other growth stocks more notable, as those groups rebounded even without meaningful relief from the recent backup in rates. The information technology sector (-0.3%) consequently finished with a relatively modest loss after being down more than 1.0% earlier, while the PHLX Semiconductor Index (-0.3%) staged a similarly sharp recovery. Oracle (ORCL 139.52, -5.04, -3.48%) remained a notable laggard after Bloomberg reported that the company sent a "force majeure" notice to the developer of its New Mexico data center project.

Meta Platforms (META 777.59, +33.49, +4.50%) moved firmly in the opposite direction and provided an outsized boost to the major averages. Shares reached year-to-date highs and extended their gain since the beginning of September to roughly 36%, with the rally accelerating following the launch of Muse. The early reception to the AI agent has given investors a clearer path toward monetizing META's substantial AI investments, helping propel the communication services sector (+1.9%) to the top of the standings.

The health care sector (+0.7%) was another standout, supported by continued strength in Moderna (MRNA 194.82, +12.71, +6.98%) and Eli Lilly (LLY 1183.79, +32.80, +2.85%), while the energy sector (+0.4%) finished higher alongside the increase in crude oil. The financials sector ended flat.

Most other areas remained in negative territory despite the recovery in the headline averages. The materials (-1.0%), utilities (-1.0%), and consumer staples (-1.0%) sectors recorded the widest losses, followed by the industrials sector (-0.7%) and real estate sector (-0.4%). That weakness was reflected in market breadth, with decliners outpacing advancers by nearly 2-to-1 on the NYSE and roughly 3-to-2 on the Nasdaq late in the session.

There were also several pronounced stock-specific moves. Everpure (P 121.83, +12.18, +11.11%) surged to record highs following a bullish Analyst Day, while MGM Resorts (MGM 33.68, -4.17, -11.02%) was among the S&P 500's weakest performers after confirming that People Incorporated (PPLI 35.93, -0.04, -0.11%) withdrew its acquisition proposal.

Thursday's session ultimately looked considerably different at the close than it did near the morning lows. The retreat in oil from above $96 per barrel helped alleviate one of the market's primary early pressures, allowing technology, semiconductors, and mega-cap stocks to recover much of their early weakness despite Treasury yields remaining elevated. That helped the S&P 500 and Nasdaq erase their losses, although negative breadth and declines across most sectors pointed to a weaker underlying session than their flat finishes suggested.

U.S. Treasuries tried to recover from yesterday's sell-off, but that effort ultimately failed, even as reports suggested the U.S. and Iran are exploring discussions about a phased reopening of the Strait of Hormuz.  Like yesterday's 5-year note auction, today's $44 billion 7-year note auction saw some relatively soft dollar demand and foreign interest. Renewed selling hit the market after the results were released at 1:00 p.m. ET and left most securities at, or near, their highs for the session at the cash close. The 2-year note yield setteld up two basis points to 4.91%, and the 10-year note yield settled up seven basis points to 5.18%. 

• Nasdaq Composite: +15.9% YTD
• Russell 2000: +14.4% YTD
• S&P 500: +12.5% YTD
• S&P Mid Cap 400: +10.1% YTD
• DJIA: +6.8% YTD