U.S. stocks continued their decline in late trading on Friday, with technology stocks leading the losses. Oil prices surged. U.S. Treasury yields jumped significantly, with the 30-year yield surpassing 5.1%, nearing its highest level since 2023.
The Dow Jones Industrial Average fell 502.68 points, or 1.00%, to 49,560.78. The S&P 500 dropped 71.96 points, or 0.96%, to 7,429.28. The Nasdaq Composite declined 302.98 points, or 1.14%, to 26,332.24.
The previously strong technology sector faced investor profit-taking. Prominent tech stocks such as Intel, AMD, Micron Technology, and NVIDIA were broadly lower. Cerebras Systems, which surged 68% on its Nasdaq debut on Thursday, also experienced a pullback.
Adam Crisafulli, an analyst at Vital Knowledge, noted that the sector's rally in recent weeks has been extremely volatile and faces profit-taking pressure regardless of news flow.
Microsoft bucked the downtrend, rising after prominent investor Bill Ackman revealed that his Pershing Square fund had taken a position in the stock.
A sharp rise in U.S. Treasury yields pressured the stock market, with the 30-year yield breaking above 5.1% and approaching its highest level since 2023.
On Friday morning, U.S. Treasury yields surged dramatically following a week of disappointing inflation data, leading traders to focus on the direction of interest rate policy under new Federal Reserve Chair Kevin Warsh.
The surge in Treasury yields comes as the newly confirmed Fed Chair, Kevin Warsh, faces an increasingly complex inflation landscape. Despite data showing rising prices in consumer and import figures, the President continues to pressure for rate cuts.
Data released this week showed the Consumer Price Index (CPI) inflation rate at 3.8%, the highest since May 2023. Similarly, the Producer Price Index (PPI), which measures wholesale costs and signals pipeline inflation pressure, recorded an annual rate of 6%, the highest since late 2022.
Additionally, data from the U.S. Bureau of Labor Statistics on Thursday showed that import prices rose 1.9% month-over-month and 4.2% year-over-year in April, driven by higher energy prices due to Middle East conflicts, which prompted importers to increase costs. The annual increase in import prices was the largest since October 2022, while export prices surged 8.8% year-over-year, reaching a peak not seen since September 2022.
Peter Boockvar, Chief Investment Officer at One Point BFG Wealth Partners, wrote in a morning report that the bond market's volatility serves as a reminder that "inflation remains a problem... debt and deficits are crucial, and sovereign bonds, heavily held by foreign investors, are now a source of funding." He added, "Long-term rates are now dictating monetary policy. I wish Kevin Warsh all the best... but he will still be constrained by the macro environment he's in."
The troubles in the U.S. bond market also reflect the country's ongoing fiscal challenges. Although the U.S. government recorded a budget surplus of $215 billion in April—due to it being tax season—it was still 17% lower than the same period in 2025. Funding issues persist, with the $97 billion spent on debt interest payments being the second-largest expenditure item after Social Security.
A series of economic data this week indicated a resurgence of inflation pressures as Middle East conflicts pushed oil prices higher. High interest rates are having the most pronounced impact on high-growth technology stocks.
Oil prices continued to rise on Friday, with U.S. West Texas Intermediate (WTI) crude futures up 3% to $104 per barrel and Brent crude futures rising 2% to $108 per barrel.
Investors were disappointed by the outcomes of the high-level U.S.-China summit. White House officials indicated that both sides agreed the Strait of Hormuz must remain open, but Vital Knowledge noted that the limited news from the summit was disappointing.
Boeing's stock extended its losses, having fallen nearly 5% in the previous session. The company secured orders for 200 Boeing aircraft, but this figure was only 50 more than previously expected, failing to meet the market's higher hopes.
Major stock indices are still on track for weekly gains, with the S&P 500 and Nasdaq Composite potentially posting their seventh consecutive week of advances.
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