Dow, S&P 500, Nasdaq rise as Wall Street rebounds; Bitcoin surges 7%
US stocks opened higher on Friday, August 21, as investors looked to recover from the previous session’s sell-off, while stabilising Treasury yields and a sharp rally in bitcoin lifted risk sentiment.
The Dow Jones Industrial Average rose 0.5%, while the S&P 500 and Nasdaq Composite gained 0.4% each.
Financial stocks and cryptocurrency-related companies led gains, with bitcoin jumping about 7% and heading for a weekly gain of more than 20%.
Robinhood shares surged 12%, while Coinbase climbed 9%. Materials stocks also outperformed, rising about 2%.
The rebound comes after Wall Street suffered a sharp decline on Thursday as Treasury yields resumed their climb despite the US government’s efforts to ease pressure in the bond market. Longer-dated Treasuries have remained under pressure amid concerns that higher oil prices could fuel inflation and complicate the outlook for interest rates. Investors are also awaiting more details on President Donald Trump’s plan for “economic warfare” against Iran.
Elsewhere, gold prices climbed to a three-month high as a weaker dollar supported demand for the precious metal. December gold futures rose to $4,569.40 an ounce, their highest level since May 15, and were on track for a fifth consecutive weekly gain. Gold has gained nearly 5% this week, extending its recovery from the second-quarter slump.
US stock futures rise as Wall Street looks to recover from yield-driven sell-off
US stock futures edged higher on Friday, August 21, as investors looked to recover from a sharp sell-off in the previous session, while concerns over rising Treasury yields and the economic fallout from the US-Iran conflict continued to keep markets on edge.
Futures tied to the Dow Jones Industrial Average rose about 0.6%, while S&P 500 futures gained 0.4%. Nasdaq-100 futures advanced 0.7%, pointing to a firmer open for technology stocks.
Wall Street is coming off a weak session in which rising Treasury yields renewed pressure on equities, particularly capital-intensive technology and artificial intelligence stocks.
On Thursday, the S&P 500 fell 0.9%, while the Nasdaq Composite declined 1%. The Dow Jones Industrial Average also ended lower. The moves put the S&P 500 and Nasdaq on track for weekly declines of around 1.9% and 2.5%, respectively, potentially ending three consecutive weeks of gains. The Dow was down about 1.8% for the week.
Treasury yields remain in focus
The latest rebound in stock futures came despite continued concerns in the bond market. Treasury yields resumed their climb after a brief respite following the US government’s efforts to support the market.
The sell-off has been concentrated particularly at the longer end of the Treasury curve, with investors worried that higher oil prices could fuel inflation and complicate the outlook for interest rates.
US Treasury Secretary Scott Bessent said on Thursday that the government plans to expand its Treasury buyback programme, including increasing the size of individual operations beyond $4 billion.
“Part of it is signaling here to show that we believe yields don’t reflect the underlying fundamentals,” Bessent told CNBC.
The move, however, provided only temporary relief. The benchmark 10-year Treasury yield and 30-year yield subsequently moved back towards their earlier higher levels, underscoring continued investor concerns over the bond market.
Trump’s Iran plan in focus
Investors are also awaiting further details of President Donald Trump’s plans to economically isolate Iran.
Trump earlier threatened “TREMENDOUS Economic Consequences” for countries that continue to trade with Iran, putting the spotlight on major trading partners such as China, which relies on oil supplies from the Gulf region.
Also Read: Can the US squeeze Iran without sending global oil prices higher? China may hold the key
Bessent is expected to provide more details of the administration’s economic measures at a press conference on Monday.
The prospect of tighter economic restrictions on Iran has added another layer of uncertainty for investors, particularly because any disruption to oil supplies could push energy prices higher and add to inflationary pressures.
Bitcoin surges above $77,000
Elsewhere, bitcoin extended its recent rally, rising to above $77,000.
The cryptocurrency has gained roughly 18% over the past 48 hours, moving above $77,600 and heading for what could be its strongest weekly performance in nearly three years.
Bitcoin had not traded above the $70,000 mark since late May before its latest surge.
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