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Stocks rise on Wall Street, stay on track for weekly gains

NEW YORK — Stocks shook off an early stumble and rose in morning trading on Wall Street on Thursday, keeping the market on track to snap a three-week losing streak.

The S&P 500 was up 0.5% at 10:58 a.m. ET. The benchmark index maintains a gain of 1.9% for the week. Stocks have mostly lost ground in recent weeks after the Federal Reserve signaled it would not stop raising interest rates anytime soon to bring down the highest inflation in decades.

The Dow Jones Industrial Average rose 133 points, or 0.4%, to 31,720 and the Nasdaq rose 0.6%.

Health care stocks made large gains. Regeneron jumped 16.9% after the company and partner Bayer reported encouraging study data on an anti-blindness drug. Banks also rose broadly. JPMorgan Chase rose 2.1%.

Bond yields remained mostly stable. The 10-year Treasury yield, which influences interest rates on mortgages and other loans, fell to 3.25% from 3.27% on Tuesday night. The two-year Treasury yield, which tends to track expectations for Fed action, fell to 3.47% from 3.44%.

Interest rate policies were at the center of investors’ concerns as the European Central Bank biggest rate hike ever, in line with measures taken by the Fed and other central banks to fight inflation. The bank’s 25-member board raised its key benchmark by three-quarters of a percentage point on Thursday.

Meanwhile, Fed Chairman Jerome Powell reaffirmed the Fed’s commitment maintain high rates “until the job is done” by returning to its 2% target.

“There is a record of failed attempts to bring inflation under control, which only increases the ultimate costs to society,” he told a monetary policy conference by the Cato Institute, a group think tank that promotes libertarian ideas.

The central bank has already hiked rates four times this year and markets expect it to deliver another whopping three-quarters of a percentage point hike at its next meeting in two weeks.

One of the Fed’s biggest fears is that households and businesses are starting to expect inflation to stay high over the long term, which could lead them to start buying in a way that creates a vicious circle making inflation even more difficult to shake.

The Fed has been criticized for not taking inflation seriously earlier, and Powell said setting interest rate policy is as much art as science. A big question remains as to whether the high inflation ravaging economies around the world is a one-off event created by the pandemic or the start of something more persistent.

Markets in Europe were higher and markets in Asia were mixed. Japan’s benchmark Nikkei 225 jumped 2.3%.

AP Business Writer Stan Choe contributed to this report.