US stocks edged higher Friday as Wall Street headed toward the end of a volatile week marked by a sharp rise in Treasury yields, falling oil prices and renewed hopes for a diplomatic breakthrough in the Middle East.
The S&P 500 rose 0.3%, while the Nasdaq Composite gained 0.4%. The Dow Jones Industrial Average added 190 points, or 0.3%.
The modest gains came as investors continued to assess whether higher bond yields and elevated energy prices could keep pressure on financial markets and revive expectations for further Federal Reserve tightening.
Treasury yields remain near multi-year highs
The bond market remained a key focus after Treasury yields surged this week.
The 10-year Treasury yield reached its highest level since 2007 on Thursday, while the 30-year yield climbed to its highest level since 2004.
Both yields edged higher Friday, with the 10-year at 5.188% and the 30-year at 5.49%.
Several factors have contributed to the move, including hawkish comments from Federal Reserve Governor Michael Barr, persistently high energy prices linked to the Iran conflict, and stronger-than-expected purchasing managers’ data.
Higher yields have increased pressure on equity valuations by raising borrowing costs and lifting the return available from government bonds.
Fed funds futures were pricing roughly a 68% probability of a rate hike in October, according to CME FedWatch.
The moves have left the Dow on track for a fourth consecutive weekly decline, although the broader market has held up better.
The Dow was down about 0.1% for the week, while the S&P 500 was on track for a 1% gain and the Nasdaq Composite was up nearly 2%.
Oil falls as Iran proposes reopening Hormuz
Oil prices provided some relief to markets Friday as investors assessed the possibility that the Strait of Hormuz could eventually reopen.
West Texas Intermediate crude fell around 2% to roughly $92 a barrel, while Brent crude declined about 1% to around $104.
Iranian Foreign Minister Abbas Araghchi said Thursday that Tehran had presented Washington with a proposal under which the Strait of Hormuz could be reopened within seven days if the US accepts certain conditions and nuclear talks resume.
“We have introduced a plan to the United States through the intermediators, that if certain conditions are met, the Strait of Hormuz will be open at the end of seven days and talks will be restored,” Araghchi told reporters at the United Nations General Assembly in New York.
Araghchi said Iran wants the US to meet conditions contained in a June 17 memorandum of understanding.
That agreement ultimately collapsed as fighting resumed over the summer.
Iran is now waiting for a response from Washington, Araghchi said.
Reuters also reported Thursday that US and Iranian negotiators in New York were considering a phased agreement aimed at ending the conflict.
The developments have helped pull oil prices lower, although uncertainty remains over whether the latest diplomatic effort can produce a durable agreement.
Akamai jumps as Meta approaches $2 trillion
Technology stocks were supported by a sharp gain in Akamai Technologies, whose shares jumped more than 14% after the company announced a multiyear agreement with Anthropic.
The deal provided a boost to sentiment around AI-related infrastructure even as investors remain concerned about the impact of higher interest rates on technology valuations.
Meta Platforms was also in focus as the Facebook and Instagram parent approached a $2 trillion market capitalization.
Meta was valued at roughly $1.98 trillion, after its shares rallied 16.8% over the past week. Investors have responded positively to the company’s new consumer AI agent, Meta Muse.
The combination of strong AI-related demand and rising bond yields is creating a more complicated backdrop for technology stocks.
Investors are rewarding evidence of growing AI monetization while simultaneously reassessing how much they are willing to pay for future growth as Treasury yields climb.
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