Wall St rises in broad rebound; yields push markets towards weekly declines

NEW YORK: The main US stock indexes recovered on Friday after a hammering in the previous session, though markets were still on track to end the week in the red as rising government bond yields and geopolitical tensions weakened risk sentiment.

The S&P 500 and the tech-heavy Nasdaq were set to snap a three-week winning streak, while the Dow was headed for a second consecutive weekly loss and its steepest weekly decline since mid-March.

On Friday, healthcare and financials were the biggest boosts to the S&P 500 and were up 1.6 percent and 1 percent, respectively.

Retail-investor platform Robinhood advanced nearly 13 percent. Crypto exchange operator Coinbase Global added 9.8 percent and bitcoin-hoarder Strategy rose 7.2 percent as bitcoin touched its highest mark since late May.

Megacap stocks were mixed as Alphabet and Microsoft gained about 1 percent each, while Nvidia and Amazon.com dropped 0.3 percent each.

Tech stocks are set to underperform peers this week, pummeled by a surge in longer-dated Treasury yields. Concerns over ballooning government debt, higher financing costs and persistent inflation fears had pushed up 30-year Treasury bond yields to a 19-year high on Tuesday.

“If you see a durable move lower in the long end of the curve, that will be a tailwind for some of the more growth-oriented areas of the market, of which that AI trade would certainly be front and center,” said Jeff Schulze, head investment strategist at the Franklin Templeton Institute.

US Treasury Secretary Scott Bessent’s announcement on Thursday that the government could further increase its Treasury repurchases after Wednesday’s surprise intervention provided short-lived respite.

“If yields can stay in the 4.7 percent to 4.75 percent range, the markets will look through this and start to trade higher,” Schulze said.

At 11:47 a.m. ET, the Dow Jones Industrial Average rose 471.32 points, or 0.89 percent, to 53,231.61, the S&P 500 was up 50.26 points, or 0.66 percent, to 7,691.42, and the Nasdaq Composite gained 168.68 points, or 0.65 percent, to 26,235.84.

Ross Stores added 4.8 percent after the value retailer raised its annual profit forecasts and reported better-than-expected second-quarter results. However, Bessent said the United States will impose “the toughest sanctions in history” on Iran, a move he suggested would lessen the need for new major military operations, keeping risk appetite in check.

The impasse between Washington and Tehran meant oil prices were higher for a sixth straight day.

UBS Global Wealth Management raised its year-end target for the S&P 500 to 8,100, citing a stronger earnings outlook and robust corporate profit growth.