US: Wall Street rises on the day but falls for the week; bond yields, Iran in focus

On Friday, August 21, the main US stock indices, including the S&P 500, Nasdaq, and Dow Jones, saw a rise in their closing prices. However, the week saw mixed results for the equity market, with investors concerned over fluctuating government bond yields and the lack of clarity on progress in the Middle East. The S&P 500 and Nasdaq had previously closed three weeks in a row with gains, while the Dow Jones recorded its second consecutive weekly loss.

US Treasury Secretary Scott Bessent had announced on Thursday that the government could increase its Treasury repurchases, a move that alleviated some of the investor jitters. With the Treasury Department's announcement, equity investors were no longer as worried about rising bond yields. Chris Zaccarelli, the chief investment officer at Northlight Asset Management, commented on the calmer trading environment on Friday, attributing it to the government's Treasury repurchase announcement.

The economic data released on Friday demonstrated the growth in the US services sector, which had accelerated in August for the first time in nearly two years. However, the manufacturing sector continued to face challenges due to reduced stockpiles and supply disruptions stemming from the Iran conflict. This growth in the services sector helped offset the slowdown in manufacturing.

The week's economic events also saw oil futures settle higher for a sixth consecutive day. With US President Donald Trump threatening economic sanctions on Iran's trading partners, investors expected tighter oil supply, pushing oil prices up. As a result, Brent futures gained 6.4 percent, while US crude rose 5.7 percent during the week.

The Dow Jones Industrial Average closed the week at 53,277.01, an increase of 1 percent from the previous week, while the S&P 500 gained 33.21 points, or 0.4 percent, reaching 7,674.37. The Nasdaq Composite also showed growth, with a gain of 113.29 points, or 0.4 percent, bringing its total to 26,180.46. The Russell 2000 small-cap index, however, experienced its most significant drop since the week starting June 1, falling by 1.7 percent.

Among the S&P 500's 11 major industry sectors, materials led the gains with a 2.2 percent advance, followed by healthcare with a 1.3 percent increase and financial stocks with a 1 percent gain. Utilities, on the other hand, led the decline for the week, with a 2.3 percent decrease. Individual stocks also performed well, with Ross Stores increasing by 4.4 percent after raising its annual profit forecasts and reporting better-than-expected quarterly results.

Robinhood's shares surged by 13.7 percent, and Coinbase Global rose by 8.2 percent, driven by a 6.4 percent increase in Bitcoin, which touched its highest levels since mid-May.