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- US equities closed mixed on Friday as bond yields pared recent gains and tech stocks bounced back slightly.
- Cyclical assets’ underperformance marked a reversal from strength seen during the week’s volatile bond-market sell-off.
- Bitcoin plummeted as low as $44,18o after trading above $52,000 on Thursday.
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US stocks wavered on Friday as bonds pared some losses and investors moved back into defensive plays.
The somewhat tepid session reverses several days of heavy selling in Treasurys that roiled the stock market. Yields soared to one-year highs as traders bet on new stimulus to lift inflation more than previously expected. The moves cut into growth stocks’ appeal and fueled a sharp rotation to cyclical assets.
The trend reversed slightly on Friday. Treasury yields dipped, offering a reprieve for equities investors overwhelmed by the week’s sudden selling. Tech stocks gained, though the Nasdaq and S&P 500 still closed out the week with a net loss.
Here’s where US indexes stood after the 4:00 p.m. ET close on Thursday:
- S&P 500: 3,810.84, down 0.48%
- Dow Jones industrial average: 30,926.84, down 1.51% (475.17 points)
- Nasdaq composite: 13,192.34, up 0.56%
Energy and financial stocks fell the most, leading the 30-stock Dow to underperform.
Federal Reserve Chair Jerome Powell indicated Tuesday the rise in bond yields signaled investors are pricing in a "robust and ultimately complete recovery," seemingly unperturbed by the rate of the Treasury sell-off. The chair reiterated that inflation remains far from the levels needed to justify tightening the Fed's ultra-loose policy stance.
Others agreed, noting the economy still has plenty of ground to make up before the Fed deems it strong enough to warrant a rate hike.
"While inflation will undoubtedly warm up in 2021, it's unlikely to spiral out of control amid a lingering demand gap in some sectors of the economy and anchored inflation expectations," economists at Oxford Economics said in a note.
The 10-year Treasury yield dipped to 1.427%, down from the 1.614% peak seen the session prior. Still, the level marks a healthy gain through the week.
GameStop, AMC, BlackBerry, and Nokia all declined as Reddit trader's attempt to repeat January's meme-stock rallies sputtered out.
Virgin Galactic tumbled after the space-tourism company again delayed a critical test flight. The postponement led the firm to push back commercial service to 2022.
DraftKings rallied after forecasting full-year revenue would reach $1 billion. The firm attributed the bullish outlook to a jump in new users and the launch of mobile sports betting in Michigan and Virginia.
Bitcoin slumped as low as $44,000 after trading above $52,000 one day prior. The popular cryptocurrency is on pace for its biggest weekly slide since last March as concerns around overvaluation cut into its recent strength.
Spot gold slid 3%, to $1,717.34 per ounce, at intraday lows. The US dollar strengthened against a basket of Group-of-20 currencies.
Oil prices declined. West Texas Intermediate crude fell as much as 3.4%, to $61.34 per barrel. Brent crude, oil's international benchmark, dropped 1.8%, to $65.70 per barrel, at intraday lows.