As Israel's ground incursion into Gaza appeared to be less extensive than investors had feared, stocks rose, Treasuries fell, and oil fell 3.5%. The yen rose in response to news that the Bank of Japan may raise the cap on bond yields.

The S&P 500 increased 1.2%, the most since August. Amazon led gains in the battered megacap space, but Tesla defied the trend, falling about 5%. Equities are still on track for their third monthly decline, which will be the longest since March 2020. US ten-year yields increased four basis points to 4.88%. The Treasury reduced its forecast for federal borrowing in the third quarter to $776 billion. The value of the dollar fell.

Oil has lost ground since the Middle East war began, as Israel faces increasing pressure to limit its bombardments in order to facilitate hostage negotiations, keeping the conflict limited as it enters its fourth week. WTI fell as much as 4.3%, with losses accelerating after crude fell below technical support levels near $82 per barrel.

Apart from geopolitical concerns, equities were hit this month by a rise in bond yields and disappointing earnings from some major technology companies. These worries drove the S&P 500's 14-day Relative Strength Index below 30 last week, which some on Wall Street interpret as a sign of an oversold market.