Dow set for fourth losing week as Treasury yields surge

U.S. stocks edged higher on Friday, but the Dow Jones Industrial Average remained on course for a fourth consecutive weekly loss as a bond market selloff kept borrowing costs elevated across the economy.

The Dow added roughly 190 points, or 0.3%, on Friday, though it remained down about 0.6% for the week as of Thursday’s close. The S&P 500 was set to close the week up 0.7% after rising 0.3% Friday, and the Nasdaq was heading for a 1.6% weekly advance after gaining 0.4% on the day.

Bond yields steadied somewhat on Friday but remained at historic levels. The 10-year Treasury yield, which climbed to its highest point since 2007 on Thursday, was last trading at around 5.183%. The 30-year yield, which reached its highest level since 2004 on Thursday, stood at around 5.478%. The 10-year yield has risen 16 basis points just this week.

Several forces pushed yields higher this week: Federal Reserve Governor Michael Barr struck a hawkish tone, energy prices stayed elevated amid the Iran conflict, and a robust purchasing managers’ report added to the pressure. According to the CME FedWatch tool, fed funds futures now price in about a 66% chance of a rate hike at the October meeting.

The 30-year fixed mortgage rate has climbed to 7.45%, a level not seen since 2024, as rising Treasury yields lift consumer borrowing costs. In a note to clients, Morgan Stanley’s Heather Berger said higher borrowing costs are set to squeeze household outlays, with the drag concentrated in goods purchases, and that the bank is forecasting real consumption growth to slow by 40 basis points next year as a result.

Oil prices fell on Friday, helping ease some pressure on bond markets. WTI crude settled around $92 a barrel, off about 2% on the session, while Brent fell roughly 1%. Prices fell after Iranian Foreign Minister Abbas Araghchi said Tehran would consider reopening the Strait of Hormuz and resuming nuclear diplomacy with Washington within a week, provided the U.S. met Iran’s terms. On Thursday, U.S. and Iranian negotiators in New York were said to be considering a phased agreement to end the Middle East conflict, according to CNBC.

On the equities side, Akamai Technologies stock jumped more than 14% after the company announced a multi-year deal with Anthropic.

Separately, speaking to CNBC on Friday, U.S. Trade Representative Jamieson Greer said additional specifics on the bilateral trade talks with China would become public on Monday. Treasury Secretary Scott Bessent said earlier this week that the two countries agreed to extend their trade truce by two months.