Synopsis
U.S. stocks retreated from all-time highs as rising crude oil prices and rising Treasury yields sparked fresh inflation concerns. The selloff hit AI-based technology stocks hardest, as markets reassessed the risks of rate hikes under new Fed leadership, with geopolitical tensions and bond market signals dampening investor sentiment.
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ReutersU.S. stocks retreated from AI-fueled record highs on Friday as surging crude prices sparked global inflation fears.
All three major U.S. stock indexes fell, with rising benchmark Treasury yields reflecting rising energy prices and concerns about long-term inflation providing an attractive alternative to higher-risk stocks.
“There’s a realization that the market has gotten ahead of itself,” said Kenny Polcari, chief market strategist at Slatestone Wealth in Jupiter, Florida. “He didn’t pay enough attention to what the bond market and economic data were telling him. He got caught up in this AI business momentum.” Crude prices jumped after combative comments from US President Donald Trump and Iranian Foreign Minister Abbas Araqchi which raised doubts about the holding of the fragile truce between their two countries and dampened hopes for an imminent resumption of normal traffic in the crucial Strait of Hormuz. Trump’s meeting with Chinese President Xi Jinping concluded with few tangible results, with Beijing offering no clear help to resolve the US-Iran conflict.
“It was certainly encouraging to see the two countries engaging again at the highest level. Historically, these types of events make headlines outlining various commitments,” said Matthew Keator, managing partner of the Keator Group, a wealth management firm in Lenox, Massachusetts. “This week’s meeting felt more like a reset of relations between the two countries than less quantifiable short-term results.”
The yield on 10-year Treasury notes, a gauge of global borrowing costs, rose to its highest level since May 2025, when markets were reeling from Trump’s “Liberation Day” tariff proclamation. Global bond yields also jumped amid growing evidence of widespread economic damage caused by the war in Iran.
END OF THE POWELL ERA
Friday marks Jerome Powell’s final day as chairman of the U.S. Federal Reserve, a position he has held through the pandemic, periods of inflation and cycles of raising and lowering interest rates.
The new president, Kevin Warsh, is grappling with the potential need for a rate hike if a prolonged war in Iran leads to persistent inflation.
“Today’s weakness highlights concerns that recent (inflation) numbers may not be fleeting, and it is hard to imagine the new president communicating anything other than a neutral policy stance, at best, until we see a consistent and meaningful change in the data,” Keator added.
The odds that the Fed will raise interest rates by 25 basis points in December are approaching 40%, up from 13.6% a week ago, according to the CME Group’s FedWatch tool.
According to preliminary data, the S&P 500 lost 91.62 points, or 1.22%, to end at 7,409.62 points, while the Nasdaq Composite lost 412.61 points, or 1.53%, to 26,226.35. The Dow Jones Industrial Average fell 537.35 points, or 1.06%, to 49,531.70.
The Philadelphia SE Semiconductor Index was dragged down by stocks that benefited from the AI hyperscaler phenomenon.
Nvidia, AMD and Intel ended the session sharply down. Microsoft rose following the disclosure of a new position in the company taken by Bill Ackman’s Pershing Square hedge fund. Dexcom jumped after the medical device maker’s announcement that it would appoint two independent directors and reorganize a board committee in conjunction with activist investor Elliott Investment Management.
Ford slipped, retreating after rising nearly 21% over the past two sessions on optimism about the automaker’s energy storage business.
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(What’s moving Sensex And Clever Track latest market news, stock market advice, Budget 2025, Equity market on the 2025 budget And expert adviceon AND Markets. Additionally, ETMarkets.com is now on Telegram. For the fastest news alerts on financial markets, investment strategies and stock market alerts, subscribe to our Telegram feeds .)
Subscribe to AND Bonus and read it Electronic document on economic times Online.and Sensex today.
Most trending stocks: SBI share price, Axis Bank share price, HDFC Bank share price, Infosys share price, Wipro stock price, NTPC stock price
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