The main U.S. stock indexes rose on Friday but were on track for weekly losses after days of fluctuating government bond yields and a lack of clarity on progress in the Middle East rattled investors.
The S&P 500 and the tech-heavy Nasdaq were looking to snap a three-week winning streak, while the Dow was headed for a second consecutive weekly loss and its steepest weekly decline since mid-March.
Equity investors have been reacting to the direction of U.S. government bond yields in recent sessions as the prospect of higher borrowing costs fanned worries about inflation and dampened risk appetite.
Stocks had closed lower on Thursday as bond yields rose. Stocks had moved higher on Wednesday as bond yields fell. U.S. Treasury Secretary Scott Bessent said on Thursday that the government could further increase its Treasury repurchases after a surprise announcement on Wednesday that it would spend double the expected amount on bond buybacks.
“Markets are taking a bit of a breather. It’s a pretty calm day,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management in Charlotte, North Carolina.
“We’ve had a bit of a seesaw week where we had some ups and downs around Treasury yields climbing and the intervention from Treasury Secretary Bessent.”
Also helping to ease investor worries was Friday’s economic data, which showed that the strongest growth in the U.S. services sector in nearly two years powered a sharp acceleration in overall business activity in August. This offset a slowing of growth in a manufacturing sector that is being restrained by reduced stock building and supply disruptions from the Iran war.
However, oil futures rose again on Friday for a sixth straight day, after U.S. President Donald Trump threatened economic sanctions on Iran’s trading partners, raising expectations of tighter supply in the coming weeks.
At 2:27 p.m. EDT (1827 GMT), the Dow Jones Industrial Average rose 479.53 points, or 0.90%, to 53,236.30, the S&P 500 gained 31.16 points, or 0.41%, to 7,672.32 and the Nasdaq Composite gained 88.14 points, or 0.34%, to 26,155.31.
UBS Global Wealth Management raised its year-end target for the S&P 500 to 8,100, citing a stronger earnings outlook and robust corporate profit growth.
Among the S&P 500’s 11 major industry sectors, most were advancing on Friday, with materials up more than 2% and leading gains, while utilities lagged the most, with a 1.7% drop.
In individual stocks, Ross Stores added 5.5% after the value retailer raised its annual profit forecasts and reported better-than-expected second-quarter results.
Retail investor platform Robinhood advanced 14%. Crypto exchange operator Coinbase Global added 7.9% and bitcoin-hoarder Strategy rose 6.6% as bitcoin rallied more than 6% and touched its highest levels since mid-May.
In the week ahead, attention will turn to quarterly results from AI chip leader Nvidia and software companies such as Intuit, Salesforce and CrowdStrike.
Next week’s data releases include July’s Personal Consumption Expenditures price index (PCE), which is the U.S. Federal Reserve’s preferred inflation gauge. Tame July readings for consumer and producer prices had knocked down bets of an imminent central bank rate hike.
Investors are also waiting for Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium at the end of next week.
Advancing issues outnumbered decliners by a 1.72-to-1 ratio on the New York Stock Exchange, where there were 169 new highs and 96 new lows. On the Nasdaq, 3,004 stocks rose and 1,738 fell as advancing issues outnumbered decliners by a 1.73-to-1 ratio.
The S&P 500 posted 9 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 74 new highs and 66 new lows.