Wall Street rises as materials and crypto stocks offset continued bond sell-off

Wall Street experienced a rise on Friday, despite a bond market sell-off continuing. The materials sector saw a surge, cryptocurrency-related stocks rallied, and positive U.S. business activity data boosted sentiment. The S&P 500 gained 0.5% to 7,682.60 points, the NASDAQ Composite advanced 0.6% to 26,214.85 points, and the Dow Jones Industrial Average increased 0.8% to 53,187.14 points.

Much of the week's focus was on fixed-income markets, particularly U.S. Treasury bonds, which had been selling off since the Federal Reserve's July interest rate decision. Inflation concerns due to rising oil prices and worries about mega-cap companies issuing debt for AI infrastructure spending contributed to the sell-off. The 30-year yield reached a 19-year high of 5.337%, while the 10-year yield hit a 52-week high of 4.748%.

However, Treasury's decision to increase the size of repurchases of long-dated government debt to $4 billion from $2 billion sparked a rally in long bonds, causing yields to decline. This relief was short-lived, as yields have since ticked up once more. Fiscal concerns, such as the U.S. debt surpassing $40 trillion and ongoing high oil prices, have further clouded the market.

The materials sector's 2.2% jump was driven by record-high copper prices, fueled by mine disruptions in South America, falling refined output from China, potential U.S. tariffs on copper imports, and strong demand for the metal due to AI infrastructure buildout. Cryptocurrency-related stocks also contributed to Friday's gains, with Robinhood Markets and Coinbase surging 13.2% and 8.4%, respectively, and Bitcoin and other cryptocurrencies receiving significant bids following the U.S. Treasury's intervention move and President Trump's call for clear regulation.

U.S. business activity growth improved to 56.0 in August, driven by a strong services sector and a revival in jobs growth. However, supply delays and elevated price pressures, particularly in energy, remain concerns for businesses.