U.S. stocks continued to decline during Friday's midday session, led by a downturn in technology shares. Oil prices surged significantly. U.S. Treasury yields rose sharply, with the 30-year yield surpassing 5.1%, approaching its highest level since 2023.
The Dow Jones Industrial Average fell by 494.48 points, or 0.99%, to 49,568.98. The Nasdaq Composite dropped 339.74 points, or 1.28%, to 26,295.48. The S&P 500 index declined by 76.15 points, or 1.02%, to 7,425.09.
The technology sector, which had shown strong performance recently, faced investor profit-taking. Major technology stocks such as Intel, AMD, Micron Technology, and Nvidia experienced broad declines. Cerebras Systems, which surged 68% on its Nasdaq debut on Thursday, also saw a pullback.
Adam Crisafulli, an analyst at Vital Knowledge, noted that the sector's rally in recent weeks has been highly volatile and is under profit-taking pressure regardless of news developments.
Microsoft bucked the trend and moved higher after prominent investor Bill Ackman revealed that his Pershing Square fund had taken a position in the stock.
A significant rise in U.S. Treasury yields pressured the stock market, with the 30-year yield breaking above 5.1% and nearing its peak for the year.
On Friday morning, U.S. Treasury yields surged sharply 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.
As Treasury yields spiked, newly confirmed Fed Chair Warsh, who received Senate approval on Wednesday, faces an increasingly complex inflation landscape. Despite data showing rising consumer prices and import costs, former President Trump continues to pressure for interest rate cuts.
Data released this week showed the Consumer Price Index inflation rate at 3.8%, the highest since May 2023. Similarly, the annual Producer Price Index, which measures wholesale costs and signals pipeline inflation pressures, came in at 6%, the highest since late 2022.
Additionally, data from the U.S. Bureau of Labor Statistics on Thursday showed 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 import price increase 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 bond market volatility serves as a reminder that "inflation remains an issue... debt and deficits are critical, 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 the best... but he will still be constrained by the macro environment he inherits."
The challenges in the U.S. bond market also reflect the country's ongoing fiscal difficulties. Although the U.S. government recorded a budget surplus of $215 billion in April—due to the tax season—it was still 17% lower than the same period in 2025. Funding issues persist, with the $97 billion allocated for debt interest payments becoming the second-largest expenditure item after Social Security.
A series of economic data this week indicated a resurgence in inflationary pressures as the Middle East conflict pushed oil prices higher. High interest rates have had the most pronounced impact on high-growth technology stocks.
Oil prices continued to climb on Friday, with U.S. West Texas Intermediate crude futures rising 3% to $104 per barrel and Brent crude futures increasing 2% to $108 per barrel.
Investors expressed disappointment over the outcomes of the high-level U.S.-China summit. While White House officials indicated both sides agreed the Strait of Hormuz must remain open, 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 trading session. The company secured orders for 200 Boeing aircraft, but this figure was only 50 more than prior expectations, failing to meet the market's higher hopes.
Major stock indices are still on track to post gains for the week, with the S&P 500 and Nasdaq Composite potentially marking their seventh consecutive week of advances.
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