S&P 500 rebounds 0.43% as AI debt issuance and Treasury yields fuel volatility

The S&P 500 rose 0.43% to close at 7,674.37 on Friday, while the Nasdaq Composite gained 0.43% to 26,180.45 and the Dow Jones Industrial Average advanced 517.80 points, or 0.98%, to 53,277.01. Healthcare, financial and crypto-linked stocks supported the rebound, although the S&P 500 lost 1.4% for the week, the Nasdaq fell 2% and the Dow declined 0.9%. AI companies have issued roughly $220 billion of debt this year, according to BNP Paribas data, adding to competition with the U.S. government for investor capital as the 10-year Treasury yield remained near 4.70%-4.734% and the 30-year yield near 5.24%-5.273%, after reaching 5.33%, its highest level since 2007. Treasury Secretary Scott Bessent expanded long-end buybacks from a $2 billion maximum to at least $4 billion per operation beginning Sept. 9, but Cato Institute research fellow Jai Kedia said the purchases were too small to have a lasting effect in a Treasury market exceeding $30 trillion. Kalshi traders assigned a 56% chance that the 10-year yield ends 2026 at 4.75% or higher and a 27% chance of ending at 5% or above, while Polymarket gave two-in-three odds that it crosses 4.8% during 2026.

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