Wall Street closed the week with modest gains on Friday, as a pullback in oil prices offered some relief, but elevated Treasury yields continued to weigh on investor sentiment. The S&P 500 advanced 0.3%, the Nasdaq Composite added 0.4%, and the Dow Jones Industrial Average climbed 190 points, or 0.3%.
The session capped a volatile week dominated by a sharp rise in bond yields, falling energy prices, and cautious optimism over a potential diplomatic breakthrough in the Middle East. Investors remained focused on whether higher borrowing costs and persistent inflation pressures could prompt the Federal Reserve to tighten policy further.
Treasury yields hold near multi-year highs
The bond market remained a central focus, with the 10-year Treasury yield touching its highest level since 2007 on Thursday, while the 30-year yield reached a peak not seen since 2004. Both yields edged higher again on Friday, with the 10-year at 5.188% and the 30-year at 5.49%.
The move has been driven by a combination of hawkish comments from Federal Reserve Governor Michael Barr, elevated energy prices tied to the Iran conflict, and stronger-than-expected purchasing managers' data. Higher yields raise borrowing costs and increase the appeal of government bonds, putting pressure on equity valuations.
According to CME FedWatch, fed funds futures were pricing in roughly a 68% probability of a rate hike in October. The Dow was on track for a fourth consecutive weekly decline, though the broader market fared better, with the S&P 500 poised for a 1% weekly gain and the Nasdaq up nearly 2%.
Oil falls as Iran proposes reopening Hormuz
Oil prices provided some relief on Friday as investors weighed the possibility that the Strait of Hormuz could eventually reopen. West Texas Intermediate crude fell around 2% to roughly $92 a barrel, while Brent crude declined about 1% to around $104.
Iranian Foreign Minister Abbas Araghchi said Thursday that Tehran had presented Washington with a proposal under which the Strait of Hormuz could be reopened within seven days if the US accepts certain conditions and nuclear talks resume. Araghchi told reporters at the United Nations General Assembly that Iran is waiting for a response from Washington.
Reuters also reported that US and Iranian negotiators in New York were considering a phased agreement aimed at ending the conflict. While the developments have helped pull oil prices lower, uncertainty remains over whether the latest diplomatic effort can produce a durable agreement.
Akamai jumps, Meta nears $2 trillion
Technology stocks were supported by a sharp gain in Akamai Technologies, whose shares jumped more than 14% after the company announced a multiyear agreement with Anthropic. The deal boosted sentiment around AI-related infrastructure, even as investors remain concerned about the impact of higher interest rates on technology valuations.
Meta Platforms was also in focus as the parent of Facebook and Instagram approached a $2 trillion market capitalization. Meta was valued at roughly $1.98 trillion after its shares rallied 16.8% over the past week, driven by positive investor response to its new consumer AI agent, Meta Muse.
The combination of strong AI-related demand and rising bond yields is creating a more complicated backdrop for technology stocks. Investors are rewarding evidence of growing AI monetization while simultaneously reassessing how much they are willing to pay for future growth as Treasury yields climb.
This article is for informational purposes only and does not constitute financial advice.
