Wall Street concluded a volatile week with a rise in stocks and a stabilization in bonds, reigniting risk appetite which also boosted cryptocurrencies. The S&P 500 trimmed its weekly slide with a 0.3% gain, while the Nasdaq 100 fluctuated after a five-day decline. Bitcoin surged near $77,000, heading for its best weekly performance in over three years, rising 5.7% to $76,807.17. Meanwhile, the Bloomberg Dollar Spot Index fell 0.2%, and oil prices eased.
Investors are grappling with the aftermath of a week marked by spiking bond yields due to inflation concerns and government spending. The US Treasury intervened to manage longer-term borrowing costs and is now expected to announce new fiscal consolidation measures from Treasury Secretary Scott Bessent. Joe Maher of Capital Economics anticipates long-dated Treasury yields will stabilize in the short term, though he foresees continued upward pressure from term premia over the medium term. Goldman Sachs Group Inc. highlighted that cooling inflation remains the most effective way to lower bond yields, suggesting that the Treasury's debt buyback plans might be short-lived without addressing underlying US macro drivers.
Despite bond market turbulence, Ulrike Hoffmann-Burchardi at UBS Chief Investment Office recommends maintaining diversified equity exposure across sectors and regions, balancing cyclical, tech, and defensive stocks. As of 10:15 a.m. New York time, the S&P 500 was up 0.3%, the Nasdaq 100 was down 0.2%, and the Dow Jones Industrial Average rose 0.7%. The euro was largely unchanged at $1.1679, and the Japanese yen strengthened 0.1% to 158.84 per dollar. The yield on 10-year Treasuries advanced one basis point to 4.72%.
