Dow Jones, S&P 500, Nasdaq: Stocks rise on tech earnings; bond yields hit multi-year highs
Apple shares tumble more than 7% after disappointing forecast on component shortages
On Friday, US stocks climbed as Amazon and Microsoft reported strong earnings, fueling enthusiasm for the AI sector. Meanwhile, longer-term Treasury yields reached fresh multi-year peaks due to worries about potential inflation from surging oil prices. Currency markets remained on alert for further intervention, following Japan's earlier support of the yen.
Microsoft had forecast robust cash generation through 2027, while Amazon showcased its strongest cloud growth in over four years, alleviating concerns about wasteful spending. The Dow Jones Industrial Average climbed 0.53%, the S&P 500 increased 0.70%, and the Nasdaq Composite surged 1.00%, reaching 25,373.85. Apple's shares dipped over 7% after a disappointing forecast highlighted difficulties in securing components amid an AI-driven data-center boom straining global supply chains.
South Korea's KOSPI recovered 17.91%, marking a record comeback after recent losses. The tech-heavy bourse, still approximately 30% below its all-time high, has become emblematic of the volatile investor sentiment towards AI stocks. Global stocks, as measured by MSCI, rose 1.22%, while the pan-European STOXX 600 index declined 0.12%, and Europe's FTSEurofirst 300 index slipped 0.09%.
Longer-term Treasury yields surged after several dissenting Federal Reserve officials publicly backed higher rates during the week. The Fed maintained rates as expected, yet the uncertainty surrounding the decision heightened, with traders adjusting to Fed Chairman Kevin Warsh's preference for less guidance. The 10-year bond yield rose 4.51 basis points to 4.708%, reaching a high since January 2025.
The 30-year bond yield gained 4.39 basis points to 5.2509%, the highest since mid-2007. Traders now anticipate a 69% chance of a rate increase at the Fed's September meeting. Oil prices climbed more than $1 per barrel, marking their biggest monthly gains since March, as Iran reportedly forced tankers to turn back in the Strait of Hormuz, exacerbating global supply concerns.
The yen strengthened 0.22% against the dollar following Japanese intervention, and the US Treasury hinted at potential intervention in the yen market, with BOJ Governor Kazuo Ueda signaling a readiness to accelerate rate hikes if conditions permit. Analysts note that yen intervention has been ineffective in providing sustainable support and doubt the currency's outlook will improve without actual rate hikes. The dollar index fell 0.12% to 99.95, while the euro rose 0.02% to $1.1529.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
