Dow slides 1% as bond market pressure eases after cooler economic data

lost roughly a fifth of its value and was the main reason the Dow fell so much. The company, which helps businesses manage their customers, reported weaker for the latest quarter than analysts expected, though its profit topped estimates. It also gave forecasts for revenue in the current quarter and fiscal year that fell short of Wall Street’s. Shares tumbled 19.8%.

fell even more, 26.3%, after reporting a surprise loss for the latest quarter when analysts were expecting to see a profit. The retailer said sales fell in the quarter from a year earlier as customers pulled back on clearance items. It cut its forecasts for sales and other financial targets this year because of the stumble.

Helping to support the market were better-than-expected profit reports from a range of companies. topped forecasts even though its sales fell short last quarter, and its stock rose 10.8%. ran 27.6% higher after likewise reporting better-than-expected profit despite ringing up sales shy of analysts’ forecasts.

Stocks also broadly got a boost from easing in the . That helped most stocks on Wall Street to climb, and the smaller stocks in the Russell 2000 index gained 0.8%.

The drop in yields offered relief after they had climbed earlier this week on worries about tepid demand for Treasury bonds following several U.S. government auctions. Higher yields put downward pressure on all kinds of investments.

Yields fell Thursday after a couple of reports showed the U.S. economy isn’t quite as strong as expected. The hope on Wall Street is that the economy can cool down, but not by too much so that the can hit a precise landing where it gets high under control without causing a bad recession.

One report showed more U.S. workers applied for unemployment benefits last week than expected, though the number of layoffs still remains low compared with history. Another suggested the overall U.S. economy’s growth may not have been quite as strong as earlier thought.

A slowdown in the economy could give the Federal Reserve more confidence that inflation is sustainably heading down to its 2% target. That in turn could convince it to cut the federal funds rate, which has been sitting at the highest level in more than two decades.

The yield on the 10-year Treasury fell to 4.56% from 4.62% late Wednesday. The two-year yield, which more closely tracks expectations for Fed action, fell to 4.93% from 4.98%.

The more important data point will likely arrive Friday, when the U.S. government offers the latest monthly update on a gauge of inflation that the Federal Reserve prefers to use. That report “could dominate market sentiment until next Friday’s jobs report,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

Stubbornly high inflation earlier this year forced investors to push back repeatedly their forecasts for rate cuts this year, which proved way too optimistic.

Until then, the tail end of earnings reporting season could offer the main drivers for the market. Profits have largely been better than expected for the start of 2024.

Outside of Salesforce, other tech-related companies had warmer market receptions to their latest profit reports.

jumped 13% after the software company topped expectations for both profit and revenue in the latest quarter. HP gained 11.7% after edging past forecasts for earnings.

Many retailers are also reporting, as they usually do to close each earnings season, and scrutiny is high because of worries about cracks forming in the main engine of the U.S. economy, spending by U.S. households. Still-high inflation is hurting, particularly those making lower incomes.

Dollar General rose 2.9% after beating profit forecasts and edging past expectations for revenue in the latest quarter. The retailer, which serve many lower-income customers, said it saw strong traffic growth at its stores through the quarter.

Build-A-Bear Workshop tumbled 11.4%. The company, where customers can build their own stuffed animals, reported worse drops in revenue and results for the latest quarter than analysts expected. The company said it had to contend with a “weaker spending environment” overall that dragged on its business.

In stock markets abroad, indexes rose modestly in much of Europe after struggling in Asia. Japan’s Nikkei 225 fell 1.3%, South Korea’s Kospi dropped 1.6% and Hong Kong’s Hang Seng sank 1.3%.