U.S. stocks closed lower on Friday, led by declines in the technology sector, with the Dow Jones Industrial Average falling more than 500 points. A sharp rise in U.S. Treasury yields, with the 30-year yield surpassing 5.1% and approaching its highest level since 2023, weighed on the market.
The Dow dropped 537.35 points, or 1.07%, to close at 49,526.11. The Nasdaq Composite fell 410.08 points, or 1.54%, to 26,225.14, and the S&P 500 declined 92.74 points, or 1.24%, to 7,408.50.
The previously strong technology sector faced investor profit-taking. Major 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 recent rally has been highly volatile and is under pressure from profit-taking regardless of news flow.
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.
U.S. Treasury yields climbed sharply, with the 30-year yield breaking above 5.1% and nearing its highest level since 2023, putting pressure on equities.
Yields surged on Friday morning following a week of disappointing inflation data, leading traders to focus on the interest rate policy path under new Federal Reserve Chair Kevin Warsh.
The surge in Treasury yields comes as the newly confirmed Fed Chair Warsh, who was approved by the Senate on Wednesday, faces an increasingly complex inflation picture. While consumer price and import data show prices are climbing, President Trump continues to pressure for rate cuts.
Data released this week showed the Consumer Price Index inflation rate at 3.8%, the highest since May 2023. Similarly, the Producer Price Index, which measures wholesale costs and signals pipeline inflation pressures, recorded an annual rate of 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 from Middle East conflicts pushing up costs for importers. The annual import price increase was the largest since October 2022, while export prices surged 8.8% year-over-year, hitting a peak not seen since September 2022.
Peter Bookvar, Chief Investment Officer at One Point BFG Wealth Partners, wrote in a morning note that bond market volatility is a reminder that "inflation remains an issue... debt and deficits matter, and sovereign bonds, heavily held by foreign investors, are now a source of funding." He added, "Long-term rates are now in charge of monetary policy. I wish Kevin Warsh the best... but he will still be a prisoner of the macro environment he's in."
The U.S. bond market's struggles also reflect the country's ongoing fiscal challenges. Although the U.S. government recorded a $215 billion budget surplus 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 used for debt interest payments being the second-largest expenditure item after Social Security.
A series of economic data this week indicated a resurgence in inflation pressures as Middle East conflicts push oil prices higher. High interest rates are most acutely impacting high-growth technology stocks.
Oil prices continued to climb on Friday, with U.S. West Texas Intermediate 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. 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 decline after falling nearly 5% in the previous 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 indices are still on track for weekly gains, with the S&P 500 and Nasdaq Composite poised for a seventh consecutive week of advances.
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