US stocks fell sharply on Friday as rising Treasury yields, persistent inflation concerns, and escalating energy prices pressured markets following another record-setting session for major indexes.
The Dow Jones Industrial Average dropped roughly 402 points, or about 0.8%, while the S&P 500 fell 1.13%.
Nasdaq Composite led declines, sliding about 1.58% as investors pulled back from high-growth technology stocks that had powered much of the market’s recent rally.
The selloff came after the S&P 500 and Nasdaq Composite closed at record highs Thursday, while the Dow reclaimed the 50,000 level for the first time in months.
Bond yields surged as investors reassessed the likelihood of future Federal Reserve policy tightening amid renewed inflation pressures tied to the ongoing Middle East conflict.
The yield on the benchmark 10-year Treasury note climbed to roughly 4.56%, its highest level since May 2025.
The 30-year Treasury yield also rose above 5.1%, nearing levels last seen in 2023.
Markets increasingly expect inflation to remain elevated longer than previously anticipated, particularly as energy prices continue climbing.
Oil prices and Middle East tensions add pressure
Energy markets remained a central focus as crude oil prices extended gains amid continued disruptions linked to the conflict involving Iran.
Brent crude rose nearly 3% to around $109 per barrel, while US West Texas Intermediate crude climbed toward $104.
Concerns over global energy supplies intensified as the Strait of Hormuz remained closed, threatening a critical shipping route for global oil flows.
The CBOE Volatility Index, commonly referred to as Wall Street’s “fear gauge,” climbed to a two-week high near 19.2 as investor anxiety increased.
Economic reports released this week also reinforced concerns that rising energy costs could spill over into broader inflation across the economy.
According to CME Group’s FedWatch tool, the probability of a 25-basis-point Federal Reserve rate hike in December has more than doubled over the past week to roughly 40%.
Meanwhile, investors were left disappointed after the summit between President Donald Trump and Chinese President Xi Jinping concluded without major policy breakthroughs.
The discussions covered trade, tariffs, Taiwan, Iran, and semiconductor supply chains.
While both countries reportedly agreed that the Strait of Hormuz should remain open, markets viewed the overall outcome as underwhelming.
Technology stocks retreat after AI-driven rally
Technology shares led Friday’s declines as investors took profits following a powerful AI-fueled rally that has dominated markets in recent months.
Nvidia fell about 3.6% in trading after surging in the previous session.
Advanced Micro Devices, Micron Technology, and Intel also declined sharply, with Intel dropping roughly 6.2%.
Cerebras Systems, which surged nearly 90% during its market debut Thursday, pulled back about 2.3%.
Applied Materials also slipped despite forecasting third-quarter revenue and adjusted profit above Wall Street expectations.
Microsoft was one of the few large technology stocks trading higher after billionaire investor Bill Ackman disclosed that Pershing Square had built a new position in the company.
Analysts warned that the broader market rally remains heavily concentrated in large-cap technology companies tied to artificial intelligence.
Despite Friday’s pullback, the S&P 500 and Nasdaq remained on track for their seventh consecutive weekly gains, while the Dow was heading for its sixth winning week in seven.
The post Dow slides 400 points as rising yields and oil prices hit tech stocks appeared first on Invezz