A cooldown in oil prices is helping to alleviate some of the pressure that has mounted on Wall Street, and U.S. stocks are trending upward. The S&P 500 gained 0.1% early Friday, putting it on track to snap a three-day losing streak characterized by significant volatility linked to rising Nasdaq futures climbed 0.5%.
The Dow is down 0.6% for the week, putting it on pace for its fourth consecutive weekly decline.
A global sell-off in the bond market has once again weighed on stocks, with the yield on the U.S. 10-year Treasury reaching its highest level since 2007. The 10-year Treasury yield moderated slightly to approximately 5.18% on Friday, following a rise above 5.20% on Thursday from Wednesday’s level of 5.11%. Nevertheless, the 10-year Treasury is up 40 basis points since September, creating a financial burden for borrowers.
Government bond yields have remained elevated as investors demand higher compensation to account for increasing risks and uncertainties, including mounting inflationary pressures stemming from the energy shock caused by the war with Iran and rising U.S. government debt.
ING Bank analysts noted in a commentary this week that factors such as elevated energy costs and inflationary pressures are likely to continue pushing U.S. 10-year Treasury yields higher.
Oil prices retreated on Friday as investors sought indications regarding the reopening of the Strait of Hormuz, a vital waterway for global energy transport. Brent crude, the international benchmark, fell 1.4% to $98.83 per barrel, remaining below the $100 threshold though still significantly higher than the roughly $72 per barrel seen in late February before the conflict began. Benchmark U.S. crude dropped 1.7% to $92.97 per barrel.
While many investors are also tracking the meeting in Washington between U.S. President Donald Trump and Chinese President Xi Jinping, analysts noted that limited concrete progress has been achieved, although the two parties discussed issues including trade, artificial intelligence, and the Middle East.
In Europe, Britain’s FTSE 100 rose 0.3% to 10,707.98. France’s CAC 40 dipped 0.1% to 8,074.83, while Germany’s DAX gained 0.6% to 25,417.28. Markets in Asia saw mixed results.
Trading venues in mainland China, Taiwan, and South Korea were closed for a holiday.
In other market activity, the U.S. dollar declined to 157.77 Japanese yen from 158.86 yen. The euro traded at $1.1402, up from $1.1380.
