The Dow Jones Industrial Average inched higher on Thursday, marking its fifth consecutive session of gains, while the Nasdaq Composite and the S&P 500 slipped slightly. Despite light trading volumes, rising US Treasury yields added pressure to megacap technology stocks, curbing broader market performance.

The Dow rose 28.77 points (0.07%) to close at 43,325.80, while the S&P 500 slipped 2.45 points (0.04%) to 6,037.59, and the Nasdaq dropped 10.77 points (0.05%) to 20,020.36.

A rise in the yield on the 10-year US Treasury note, reaching its highest level since May at 4.64% earlier in the day, weighed on growth stocks. These stocks are highly sensitive to borrowing costs, which increase with higher yields.

Six of the seven dominant megacap tech stocks, known as the "Magnificent Seven," declined. Tesla led the fall with a 1.8% drop, while Apple was the exception, rising 0.3% as it edged closer to a US$4 trillion market valuation."Going into year-end, the performance of the Magnificent Seven has been constructive, but we're starting to see cracks in this momentum," said Adam Turnquist, chief technical strategist at LPL Financial.

Despite record-breaking performance earlier in the year, the market has faced headwinds in December, largely due to the Federal Reserve's projections for fewer rate cuts in 2025.

Meanwhile, a report showed US weekly jobless claims fell to 219,000, the lowest in a month, reflecting a resilient labour market.

Cryptocurrency-related stocks also fell as Bitcoin declined 3.9%. MicroStrategy, MARA Holdings, and Coinbase all recorded losses between 1.9% and 4.8%.

As the Santa Claus rally – typically a strong period for stocks during the last five trading days of December and the first two in January – continues, market participants remain cautious amid light liquidity and mixed economic signals.

Reuters