Key facts
- Wall Street indexes opened higher on Friday, attempting a rebound after recent declines.
- Markets are on track to finish the week lower due to rising government bond yields and geopolitical tensions.
- The S&P 500 and Nasdaq Composite are set to end a three-week winning streak.
- The Dow is headed for its second consecutive weekly loss and steepest decline since mid-March.
- The 30-year Treasury yield reached its highest level since 2007 this week.
- Crypto-linked stocks like Coinbase and MicroStrategy saw significant gains.
Wall Street's major indexes opened higher on Friday, attempting a rebound after significant declines in the prior session. Despite the morning gains, the markets were still on track to close the week in negative territory, pressured by soaring government bond yields and ongoing geopolitical tensions that have dampened investor risk appetite.
The Dow Jones Industrial Average gained 9.7 points, or 0.02%, to 52,768.87 at the open. The S&P 500 rose 24.5 points, or 0.32%, to 7,665.68, while the Nasdaq Composite climbed 131.7 points, or 0.51%, to 26,198.835.
The S&P 500 and the Nasdaq Composite were poised to end a three-week winning streak, while the Dow was heading for its second consecutive weekly loss and its steepest decline since mid-March. This week's market sentiment was significantly impacted by a jump in long-dated U.S. Treasury yields, reaching their highest levels since 2007, fueled by concerns over rising government debt, increased financing costs, and persistent inflation fears.
U.S. Treasury Secretary Scott Bessent indicated on Thursday that the government might further increase its Treasury repurchases, following a surprise intervention on Wednesday. However, yields remained near recent highs, with analysts suggesting the bond market is pricing in a stronger economy and higher inflation, overriding the Treasury's actions.
Early Friday trading saw most megacap stocks, including Alphabet and Tesla, moving higher after Thursday's sell-off. Dow E-minis, S&P 500 E-minis, and Nasdaq 100 E-minis also showed gains. Ross Stores added 8% after raising its annual profit forecast and reporting better-than-expected second-quarter results.
Crypto-linked companies experienced a surge, with Bitcoin reaching its highest point since late May, following U.S. President Donald Trump's call for Congress to pass a crucial crypto bill. Coinbase Global gained 4.5%, MicroStrategy rose 6.8%, and Robinhood advanced 4.8%.
Broader risk sentiment was tempered by Bessent's statement that the U.S. would impose stringent sanctions on Iran, which he suggested could reduce the need for major military operations. This geopolitical standoff has kept oil prices elevated, though they saw a slight dip on Friday.
UBS Global Wealth Management revised its year-end target for the S&P 500 upwards to 8,100, citing a robust earnings outlook and confidence in continued corporate profit growth. Investors are also awaiting the release of the S&P Global purchasing managers' index survey for August and will be closely watching next week's Personal Consumption Expenditures data, the Federal Reserve's preferred inflation gauge, for clues on the Fed's future rate decisions. Nvidia's upcoming earnings report is also a key event to watch for the AI trade.