Dow falls 0.2% for third straight week as Treasury yield nears 5%

  • Dow Jones Industrial Average fell 0.2% Friday, extending losses to three consecutive weeks.
  • 10-year Treasury yield ended at 4.995%, while the 2-year yield settled at 4.741%.
  • Federal Reserve raised its key interest rate 25 basis points on Wednesday, its first hike in three years.

U.S. stocks ended Friday mixed as investors assessed higher interest rates, Treasury yields near 5%, inflation risks and energy-market volatility. The Dow Jones Industrial Average fell about 0.2% to 51,682.64, extending its decline to three consecutive weeks and recording its toughest week since March. The S&P 500 rose 0.2% to 7,650.50 but still posted a modest weekly loss, while the Nasdaq Composite gained about 0.4% and finished the week higher. The 10-year Treasury yield ended at 4.995%, just below 5%, while the 2-year yield settled at 4.741%, its highest 3 p.m. close since July 1, 2024, according to Dow Jones Market Data. The moves followed the Federal Reserve’s 25-basis-point rate increase on Wednesday, its first rate hike in three years. CME FedWatch data showed a 47.1% chance of another quarter-point increase and a 42.4% probability of cumulative half-point increases through December. Oil prices fell below $100 per barrel after previously exceeding that level, although markets remained focused on potential supply disruptions linked to the conflict in Iran and transport risks through the Strait of Hormuz. Technology stocks outperformed, with semiconductor shares recovering from midweek losses after Anthropic and OpenAI advocated slowing AI development for safety reasons. Jamie Dimon, CEO of JPMorgan Chase, said uncertainty remained over whether inflation had been sufficiently contained. Daniel Skelly, a portfolio manager at Morgan Stanley Wealth Management, said oil-price swings, elevated bond yields and the upcoming U.S. midterm elections could continue to drive volatility. Investors will focus on Treasury yields, energy prices and expectations for Federal Reserve policy ahead of the October meeting.

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