Stocks Stumble as Bond Yields Rise Amid Bitcoin Surge
The S&P 500 and Nasdaq Composite indexes ended their three-week winning streaks after experiencing a rough week. Despite this, US stocks closed higher on Friday, with the Dow Jones Industrial Average gaining 518 points (1%) and both the S&P 500 and Nasdaq adding 0.4%. However, trading volume was light through much of Friday afternoon as many traders appeared to have left early in anticipation of Labor Day.
The bond market continued to cause volatility, with Treasury Secretary Scott Bessent's buyback plan giving investors only brief relief. The plan aimed to signal that yields do not reflect the underlying fundamentals of the economy, but markets viewed it as a limited measure rather than a lasting fix. As a result, the 10-year and 30-year Treasury yields climbed back to their prior levels.
Meanwhile, Bitcoin had a strong week, reaching $77,000 and recording its best weekly performance in two years. This move came as investors shifted toward alternative assets during the stock market volatility. The CBOE Volatility Index (VIX) was trading near 15 on Friday, suggesting that markets expect relatively calm conditions in the near term.