NEW YORK (AP) -- U.S. stocks are rising Tuesday as pressure releases on Wall Street from the bond market.
The S&P 500 was 0.7% higher in morning trading. The Dow Jones Industrial Average was up 175 points, or 0.5%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.8% higher.
Some of the strongest action was in the bond market, where Treasury yields eased after trading resumed following a holiday on Monday. It was the first opportunity for yields to move since the weekend's surprise attack by Hamas on Israel injected caution into global markets.
Perhaps more impactfully, it was also the first trading for Treasurys since Federal Reserve officials gave speeches that traders took as a suggestion the Fed may not raise its overnight rate again. The comments helped U.S. stocks swing from early losses to gains on Monday.
The yield on the 10-year Treasury dropped to 4.67% from 4.80% late Friday, which is a considerable move for the bond market. The two-year Treasury yield, which moves more closely with expectations for the Fed's actions, sank to 4.97% from 5.09%.
Treasury yields jumped last week to their highest levels in more than a decade, following the lead of the Fed's main interest rate, which is at heights unseen since 2001. They've been the main reason for the stock market's stumbles since the summer, as worries rise that the Fed will keep its federal funds rate at a high level for longer than Wall Street hopes.
High rates and longer-term yields knock down prices for stocks and other investments, while slowing the economy in hopes of undercutting high inflation.
But the swift rise in the 10-year Treasury yield has helped pull the average long-term mortgage rate up to its highest level since 2000, and Fed officials intimated Monday such moves may help contain high inflation on their own without more hikes to overnight rates by the Fed.
The Fed's next announcement on interest rates is due Nov. 1. Traders are now betting on a 74% chance that the year will end without any more Fed rate hikes, according to data from CME Group. That's up from the 53% chance seen a week ago.
The International Monetary Fund on Tuesday lowered its forecast for global economic growth next year, in part because of the effect of high rates around the world, though it upgraded its forecasts for U.S. economic growth specifically.
Fighting in Gaza is the latest threat for the world's economy, particularly after it pushed oil prices higher on Monday. While the region under conflict is not central to the production of oil, the fear is that the violence will spill over into the politics surrounding the crude market. That in turn could hurt the flow of petroleum.
A barrel of U.S. crude fell 1.1% to $85.46, giving back a slice of its $3.59 leap a day before. Brent crude, the international standard, fell 0.7% to $87.56 per barrel.
On Wall Street, some of Monday's big stock moves also retraced themselves. Stocks of defense contractors that make weapons gave back some of their big gains, and Northrop Grumman slipped 1.6%. L3Harris Technologies fell 1.2%, though both are still up more than 8% for the week.
Airline stocks also clawed back some of their losses. They have already suspended flights into and out of Israel, and they also count fuel among their highest costs. Delta Air Lines rose 3%, and United Airlines climbed 3.2%.
PepsiCo rose 1.7% after it reported stronger profit and revenue for its latest quarter than analysts expected. The snack and drink company charged higher prices for its products during the quarter, which helped to make up for a drop in how much it sold. It also raised its forecast for profits for the full year.
Later this week, the momentum will pick up for big companies reporting their results for the summer. Delta Air Lines, JPMorgan Chase and UnitedHealth Group are among the big names on the calendar.
This could be the first quarter in a year where S&P 500 companies report stronger profits versus year-ago levels, and analysts are forecasting a broad 0.3% decline, according to FactSet.
In stock markets abroad, indexes rallied in Europe but were mixed in Asia.
In the latest signal of trouble in China's rattled property development industry, Country Garden warned that it likely won't be able to make some debt repayments when due and that its sales were under "remarkable pressure." The company had earlier been hailed as a model real estate company by Chinese authorities.