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Stocks closed lower Friday as market participants took profits on red-hot tech stocks. Still, all three main indexes were higher on the week, with the S&P 500 and Nasdaq Composite notching their seventh straight weekly wins and the Dow Jones Industrial Average bringing its weekly win streak to three.
Treasury yields spiked heading into the weekend, which didn’t help the equity market either. The yield on the 2-year Treasury jumped 8.7 basis points to 4.079% and the 10-year Treasury yield climbed 14.2 basis points to 4.601%. It’s the highest level for both in nearly a year.
“A bear-steepening yield surge is igniting turbulence on Wall Street as investors lift inflation expectations amid price pressure readings from around the world that are way too hot,” says José Torres, senior economist at Interactive Brokers. “The continued blockage of the Strait of Hormuz, amid oil prices remaining well above $100, is straining the fixed-income complex, as there’s no light at the end of the geopolitical tunnel.”
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Torres adds that many folks were hoping for a breakthrough from this week’s meeting between President Donald Trump and Chinese President Xi Jinping, “but a lack of progress on the conflict has folks throwing in their towels as it relates to the possibility for lighter interest rates.”
Indeed, CME Group FedWatch now shows futures traders have given up on rate cuts in 2026 and are now pricing in a possible quarter-point rate hike by the end of this year.
As for the stock market, the S&P 500 shed 1.2% to end at 7,408, the Nasdaq slumped 1.5% to 26,225 and the Dow gave back 1.1% to 49,526.
Tech stocks get hit by profit-taking
Several of this week’s highfliers finished in the red Friday, including Intel (INTC, -6.2%), Advanced Micro Devices (AMD, -5.7%) and Micron Technology (MU, -6.6%). And artificial intelligence (AI) chipmaker Cerebras (CBRS), which soared Thursday following its blockbuster IPO, slumped 10.1%.
Nvidia (NVDA) ended lower, too, falling 4.4% ahead of its turn on the earnings calendar, slated for after Wednesday’s close.
The company “heads into next week’s results with expectations already running hot,” says Matt Britzman, senior equity analyst at Hargreaves Lansdown. Consensus estimates are near the top end of guidance, “but as is often the case with Nvidia, the market will likely be looking for more than just a clean beat. The scale of any upside surprise will matter.”
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Britzman adds that Wall Street will be watching for commentary on the Vera Rubin roadmap, given recent rumors of a potential one-month delay to deliveries. “In isolation, that would be relatively small, but investors will not want to see anything that suggests a more material pushback for Nvidia’s next major product cycle.”
Bill Ackman’s big Microsoft bet
Microsoft (MSFT) bucked the bearish trend, rising 3.1% after Bill Ackman said in an X post on Friday that Pershing Square has initiated a stake in the tech giant.
Pershing began building its position in February, according to Ackman, and the details on the size of the position will be released later today in regulatory filings.
Microsoft is “a company we have followed for many years now offered at a highly compelling valuation,” the hedge fund manager explained, and the blue chip stock is now a “core holding.”
MSFT has been one of the worst Dow Jones stocks of the year, down X% so far, but Ackman believes Wall Street is underestimating “the resilience” of the company’s Microsoft 365 subscription suite and OpenAI investment.
