• The S&P 500 is on track for its fourth straight day of gains.
• The technology-heavy Nasdaq Composite index increased by 2.2%.
• The yield on benchmark 10-year note remained lower than the yield on the two-year bond.

Thursday was a positive day for US and European stocks as investors weighed the prospects of a global economic slowdown against the possibility that central banks could dial back their plans for interest rate hikes.

In mid-afternoon trading, the S&P 500 gained 1.4%, putting the US stocks benchmark on track for its fourth straight day of gains after ending June with its biggest first-half decline in more than 50 years. The technology-heavy Nasdaq Composite index increased by 2.2%.

The yield on the benchmark 10-year note remained lower than the yield on the two-year bond, a phenomenon known as an inverted yield curve.

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The majority of this year has been dominated by predictions that major central banks will rapidly tighten monetary policy in response to rising inflation. In recent weeks, sentiment has shifted after purchasing managers’ indices revealed a severe slowdown in the expansion of eurozone economic activity and the Institute for Supply Management reported a decline in new orders and employment in the US manufacturing sector.

“Over the last few weeks, recession fears have been so strong that markets are expressing that whatever central banks say, they won’t have the runway to raise rates to the extent they have indicated that they will,” said Tatjana Greil Castro, co-head of public markets at Muzinich & Co.