The S&P 500 rose 0.5% on Friday and is on track for a 1% weekly advance, even as a surge in Treasury yields to multi-decade highs rippled through financial markets. Fed rate-hike bets and a pullback in oil prices shaped the close of the week.
U.S. equities rose Friday as Wall Street wrapped up a volatile week, with a surge in Treasury yields rippling through financial markets. The S&P 500 was up 0.5%, the Nasdaq Composite gained 0.6%, and the Dow Jones Industrial Average advanced 421 points, or 0.8%.
Stocks head for a winning week
With Friday's gains, the Dow is heading for a winning week, up 0.1%. The S&P 500 is on track for a 1% advance, while the Nasdaq is higher by 2% week to date. Technology stocks led the advance, with Meta Platforms up more than 12% on the week amid excitement over its new AI agent, Muse. S&P 500 information technology has risen roughly 3%, the most of any sector in the index.
Bond market surge tests investor nerves
The drama continued in the bond market, where the 10-year Treasury yield climbed to its highest level since 2007, while the 30-year yield reached its highest level since 2004. The two were last seen up slightly at 5.20% and 5.517%, respectively. This week's ascent in yields was fueled by hawkish comments from Federal Reserve Governor Michael Barr, persistently high energy prices tied to the Iran war, and a hot purchasing managers' report. Fed funds futures now suggest a roughly 66% likelihood of a rate hike in October, according to the CME FedWatch tool.
Eric Diton, president of The Wealth Alliance, noted that investor sentiment has been weakening as yields rise. Still, according to Diton, the market has been "incredibly resilient" in the face of the developments, with the S&P 500 and Nasdaq roughly 1% below their recent highs.
Oil slips on Iran diplomacy hopes
Also helping sentiment, oil prices slid amid optimism that the Strait of Hormuz could reopen, as Iran has asked the U.S. to return to the memorandum of understanding from June that failed to end the Middle East conflict. West Texas Intermediate crude futures dropped 2.33% to settle at $92.41 per barrel, while Brent crude futures declined 2.14% to $104.32 a barrel.
Traders were also watching Chinese President Xi Jinping's visit to the U.S. this week. Treasury Secretary Scott Bessent said the two countries agreed to extend their trade truce by two months.
Source: CNBC
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