US Stocks Fall as Bond Yields Rise, Oil Prices Continue Volatility

The US stock market closed lower on Friday as bond yields rose and oil prices continued to fluctuate. The S&P 500 fell by 0.3% in afternoon trading, while the Dow Jones Industrial Average dropped 246 points or 0.5%, and the Nasdaq composite decreased by 0.2%. Rising pressure from the bond market weighed on stocks, as the yield on the 10-year Treasury climbed to 5.00% from 4.94% late Thursday.

The higher yields slow down the economy by making borrowing more expensive for individuals and businesses, which tends to undercut stock prices. The yield has been increasing since the COVID pandemic knocked it nearly to zero in 2020, with inflation remaining stubbornly high. It worsened due to higher oil prices caused by the war with Iran.

Oil prices have seen-sawed this week, briefly dropping below $102 before erasing its loss and pulling back to $104.58, down 0.2% from Thursday's close. Rising oil prices have pushed gasoline prices to $4.47 per gallon, up from $3.20 a year ago, according to AAA.

Asian indexes performed better, with South Korea's Kospi jumping 2.7%, and Japan's Nikkei rising 1.4%. The Bank of Japan raised its benchmark interest rate in a widely expected move, up to its highest level in 31 years.