Stock futures were mostly higher on Thursday.

The benchmark 10-year yield traded as high as 5.338%, while long-end Treasury yields hit fresh 24-year highs.

It swung between relief and fresh highs since Wednesday's lower-than-expected PCE inflation data for August and the upward revision to second-quarter GDP data, underpinning the resilience of the economy.

Investors remain focused on inflation, the fiscal deficit, Treasury supply and term premium, or the additional yield investors demand to buy a long-dated bond rather than a short-dated one.

"Softer inflation provides some support for gold, but elevated yields and lingering tightening risks remain key headwinds, with Friday's U.S. payrolls report the next major catalyst for the Fed outlook," MUFG said.

Meanwhile, oil prices edged higher as Middle East crude exports continued to recover toward prewar levels, easing some immediate supply concerns even as risks around regional shipping and the U.S.-Iran conflict persisted.

This has led to Major banks raising their oil-price forecasts.

Stocks to Watch

Bassett Furniture logged higher sales and profit, boosted by a tariff refund. Shares rose 8.5%.

Constellation Energy agreed to a $3 billion deal with Amazon to expand a Maryland power plant. Shares advanced 2.5%.

Vicor raised its third-quarter guidance, citing higher royalties from a licensing deal. The stock rose 9%.

Watch For:

Weekly Jobless Claims; ISM Report on Business Manufacturing PMI for September; Ford September Auto Sales, General Motors 3Q Sales, Nike 1Q Results

Today's Top Headlines/Must Reads:

- Apple's Biggest Battleground for Foldable Phones Is China

- The Cockpit Stabbing and Terrifying Nosedive That Brought Chaos to FlyDubai Flight 1073

- A Cancer Test Has Investors Betting Big. But Will Insurers Pay?

MARKET WRAPS Forex:

The dollar rose after briefly pulling back in the previous session following lower-than-expected U.S. PCE inflation data.

The euro fell to a 16-month low against the dollar, extending its recent slide as U.S. interest-rate rise expectations remain elevated.

Sterling rose to a two-month high against the euro possibly reflecting some independent euro weakness along with the prospect of improved U.K.-EU ties under U.K. Prime Minister Andy Burnham, ING said.

Bonds:

Treasury yields fell, having briefly touched new highs despite some relief on inflation.

Energy:

Oil prices rose as Middle East tensions remained elevated despite recovering crude exports from the Gulf.

Metals:

Gold

Gold ticked higher.

Silver

Silver prices rose, but remained caught between supportive fundamentals and challenging macroeconomic conditions.

TODAY'S TOP HEADLINES

Arla Foods to Invest Millions to Tap Protein-Rich Dairy Demand, CEO Says

Arla Foods plans to spend tens of millions of dollars to ramp up its production of skyr and cottage cheese in Europe, an investment the Danish company's chief executive said was aimed at tapping a booming consumer demand for protein-rich dairy items.

"The reason why this is an interesting investment, skyr and cottage cheese, is that it really is so embedded in a health trend that has turned out to be very global," Chief Executive Office Peder Tuborgh said in an interview.

Sanofi, Regeneron to Expand Alliance in Deal Valued at Up to $8 Billion

Drugmakers Sanofi and Regeneron Pharmaceuticals said they reached an agreement to expand their alliance to jointly develop and commercialize new immunology drugs, in a deal that could net Regeneron up to $8 billion.

France's Sanofi and Tarrytown, N.Y.-based Regeneron said Thursday that the U.S. company will receive $1 billion upfront from its European partner, and be eligible to get up to $7 billion subject to development, regulatory and commercial targets. The companies will equally share development and commercialization costs as well as potential future profits from the new drugs, they said.

AI Stock Rally Checked by Relentless Treasury Selloff

A rally in artificial-intelligence stocks was tempered by the intensifying rout in government bonds in early European trade, as investors balanced AI enthusiasm with an increasingly gloomy macroeconomic picture.

Micron Technology earnings after the bell Wednesday comfortably beat consensus expectations, renewing investor confidence that demand for the AI build-out was strong and long-lasting. The print lifted AI-related stocks in Asian trade, with South Korean giants Samsung Electronics and SK Hynix each gaining around 3%.

Eurozone Labor Market Continues to Defy Mounting Economic Headwinds

The eurozone's unemployment rate was unchanged in August despite higher interest rates and an energy crunch driven by the war in the Middle East.

The jobless rate across the 21-member currency bloc held at 6.4% in the month, according to the European statistics agency, Eurostat. This matched a consensus of economists polled by The Wall Street Journal, and remains close to record lows of 6.2%.

Trump Sending $500 Checks With Letter Touting Healthcare Record

WASHINGTON-President Trump began sending $500 checks to nearly one million people and enclosed a letter touting his record on cutting healthcare costs, just a month before voters go to the polls for the midterm elections.

The administration first announced the checks earlier this month, saying the payments would go to people who paid what it called excessive fees under the Affordable Care Act, drawing on a surplus pool of funds. On Wednesday, the president posted a video from the Oval Office saying "our Administration is doing the right thing and giving the money back to the people who were wrongly ripped off."

Hegseth Unveils New Command to Oversee Military-Drone Tech

Defense Secretary Pete Hegseth is creating a four-star combatant command for autonomous warfare, overhauling the way the Pentagon buys, tests and deploys drones and other cutting-edge technologies.

The Autonomous Warfare Command, or "AutoWarCom," will be directed to buy new drones and robotics "in the fastest peacetime shift in modern military history," Hegseth said in a speech Wednesday at U.S. Marine Corps Base Quantico, Va. The command is set to be functional in October of 2027.

Mexico Tightens Money-Laundering Rules After U.S. Pressure

Mexican authorities are stepping up their fight against cartel money laundering following pressure from the U.S. and other international authorities.

The country's legislature recently expanded anti-money-laundering laws to impose stricter due diligence requirements and push companies to collect more information on their controlling ownership, among other measures. President Claudia Sheinbaum also installed a new head of Mexico's financial intelligence unit, which gathers information on suspicious transactions and reports them to law enforcement.

Write to nina.kienle@wsj.com

TODAY IN CANADA Earnings:

Nothing major scheduled.

Economic Indicators (ET):

0930 Sep Canada Manufacturing PMI

Stocks to Watch:

Fitch Ratings: Unified Corp and Infra Framework Supports Hybrid Credit Analysis

Transurban to Buy Canada Pension Plan Investment Board's Stakes in Sydney Toll Roads; to Acquire CPPIB's 25% Interest in NorthWestern Roads Group; to Acquire CPPIB's 10.5% Interest in Sydney Transport Partners; to Acquire Toll Road Assets for A$4.5 Billion in Cash; Acquisitions Not Expected to Impact FY27 Free Cash, Distributions; No Equity Funding Required for Transactions; Ownership of NorthWestern Roads Group to Rise to 75%, From 50%; Ownership of Sydney Transport Partners to Rise to 60.5%, From 50%

Expected Major Events for Thursday 00:30/JPN: Sep Japan Manufacturing PMI

05:00/JPN: Sep Auto sales

06:00/UK: Sep Nationwide House Price Index

06:00/RUS: Sep Russian Manufacturing PMI

07:45/ITA: Sep Italy Manufacturing PMI

07:50/FRA: Sep France Manufacturing PMI

07:55/GER: Sep Germany Manufacturing PMI

08:00/ITA: Aug Unemployment

08:30/UK: Sep S&P Global UK Manufacturing PMI

09:30/US: Sep Challenger Job-Cut Report

12:30/US: 09/26 Unemployment Insurance Weekly Claims Report - Initial Claims

12:30/US: U.S. Weekly Export Sales

13:00/RUS: Weekly International Reserves

13:30/CAN: Sep Canada Manufacturing PMI

13:45/US: Sep US Manufacturing PMI

14:00/US: Sep ISM Report On Business Manufacturing PMI

14:00/US: Aug Construction Spending - Construction Put in Place

14:30/US: 09/25 EIA Weekly Natural Gas Storage Report

15:00/US: Sep Global Manufacturing PMI

20:00/US: Sep Domestic Auto Industry Sales

20:30/US: Foreign Central Bank Holdings

20:30/US: Federal Discount Window Borrowings

23:30/JPN: Sep CPI (Tokyo), CPI ex-Food (Tokyo)

23:30/JPN: Aug Labour Force Survey

23:50/JPN: Sep Monetary Base

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Expected Earnings for Thursday Accenture PLC $(ACN)$ is expected to report $3.18 for 4Q.

Acuity Inc $(AYI)$ is expected to report $4.66 for 4Q.

Amerityre Corp (AMTY) is expected to report for 4Q.

McCormick & Co Inc $(MKC)$ is expected to report $0.74 for 3Q.

NIKE Inc (NKE) is expected to report $0.43 for 1Q.

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ANALYST RATINGS ACTIONS Ally Financial Inc Cut to Equal-Weight From Overweight by Wells Fargo

BankUnited Cut to Equal-Weight From Overweight by Wells Fargo

BOK FinancialCut to Underweight From Equal-Weight by Wells Fargo

Certara Cut to Neutral From Buy by UBS

Dow Cut to Neutral From Buy by Citigroup

Fair Isaac Cut to Neutral From Buy by B of A Securities

Grocery Outlet Raised to Buy From Neutral by B of A Securities

Medpace Holdings Raised to Neutral From Sell by UBS

Moderna Cut to Sell From Neutral by Citigroup