U.S. stocks continued to decline in early Friday trading, led by a sell-off in technology shares, with the Nasdaq Composite falling 1.5%. Oil prices surged. U.S. Treasury yields climbed sharply, with the 30-year yield surpassing 5.1%, approaching its highest level since 2023.
The Dow Jones Industrial Average dropped 443.55 points, or 0.89%, to 49,619.91. The S&P 500 index fell 81.21 points, or 1.08%, to 7,420.03. The Nasdaq Composite declined 407.92 points, or 1.53%, to 26,227.31.
The previously strong technology sector faced profit-taking from investors. Major technology stocks, including Intel, AMD, Micron Technology, and NVDA 3xLongSG261006, were broadly lower. Cerebras Systems, which surged 68% on its Nasdaq debut Thursday, also pulled back.
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 trend, rising after prominent investor Bill Ackman revealed his Pershing Square fund had taken a position in the stock.
U.S. Treasury yields rose significantly, with the 30-year yield breaking above 5.1% and nearing its highest level since 2023, putting pressure on equities.
On Friday morning, U.S. Treasury yields spiked 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 surged, the newly confirmed Fed Chair Warsh, who received Senate approval on Wednesday, faces an increasingly complex inflation landscape. While consumer price and import data show prices are rising, President Trump continues to pressure for rate cuts.
Data released this week showed the Consumer Price Index inflation rate at 3.8%, the highest level since May 2023. Similarly, the Producer Price Index, 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 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 since September 2022.
Peter Boockvar, Chief Investment Officer at One Point BFG Wealth Partners, wrote in a morning report that bond market volatility reminds us that "inflation remains a problem... debt and deficits are crucial, and sovereign bonds, heavily held by foreign investors, have now become a source of funding." He added, "Long-term rates now dictate 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 $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 to pay debt interest becoming the second-largest expenditure item after Social Security.
A series of economic data this week indicated that inflationary pressures are resurfacing as Middle East conflicts push oil prices higher. High interest rates are most impactful on 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 up 2% to $108 per barrel.
Investors were disappointed with the outcomes of the high-level U.S.-China summit. White House officials indicated 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 decline, having fallen nearly 5% in the previous session. The company secured orders for 200 Boeing aircraft, but this figure was only 50 more than previous 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 potentially posting their seventh consecutive week of advances.
Comments