Stock Market Rally Stalls as Bond Yields Spike; Tech Sector Takes Hit
After hitting record highs last week, US stock markets showed signs of weakness on Friday as long-term Treasury yields surged and investors took profits in high-flying tech stocks. The S&P 500 and Nasdaq both set records but face renewed headwinds from inflation concerns.
Market Reversal Signals Volatility Ahead
Market action:
- S&P 500 reaches fresh all-time high but Friday showed initial signs of reversal
- Nasdaq-100 dropped 1.5% on Friday, worst day since March 27
- 30-year bond yield tops 5.1%, reflecting elevated inflation expectations
- Dow Jones, S&P 500, Nasdaq futures down 0.1-0.8% Sunday night
Tech Sector Battered by Yield Surge
The "Magnificent Seven" tech stocks led markets to record heights, but mounting inflation data and rising long-end Treasury yields triggered profit-taking. Cross-asset volatility is creeping back into markets as synchronized global push higher in yields pressures valuations.
Earnings Season and Geopolitical Risks
Nvidia is set to report earnings Wednesday, with Target and Walmart reporting later in the week. Investors remain focused on the Iran conflict as a key risk factor affecting sentiment. The market's April rally embedded an assumption that the Iran conflict would resolve quickly—conditions on the ground do not yet support that view.